Overall, by filing the Articles of Incorporation with the state, Ace, Bob, Cat, and Dan would become equal shareholders of the corporation, each owning 20,000 shares. They would follow the rules and policies outlined in the bylaws to govern the operations of the corporation.
1. If this business venture were to be formed as a corporation, the document that would need to be filed to form the corporation is called the Articles of Incorporation. This document contains important information about the corporation, such as its name, purpose, stock structure, and the names and addresses of the initial directors.
2. The document to form the corporation, the Articles of Incorporation, would typically be filed with the state government. Specifically, it would be filed with the Secretary of State's office in the state where the corporation is being formed.
3. Based on their investment into the corporation, Ace, Bob, Cat, and Dan would be referred to as shareholders or stockholders. They would be the owners of the corporation, with each of them having equal ownership since they agreed to be equal owners.
4. In this structure, with a total of 80,000 shares, each investor would receive an equal number of shares. So, each investor would receive 20,000 shares. This means that Ace, Bob, Cat, and Dan would each own 20,000 shares of the corporation.
5. The internal document that would be referred to for the rules and policies of the corporation is called the bylaws. The bylaws outline how the corporation will be governed and provide guidelines for important aspects such as shareholder meetings, director responsibilities, and decision-making processes.
Overall, by filing the Articles of Incorporation with the state, Ace, Bob, Cat, and Dan would become equal shareholders of the corporation, each owning 20,000 shares. They would follow the rules and policies outlined in the bylaws to govern the operations of the corporation.
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Which of the following is true as it pertains to the ending Work in Process Inventory?
A. It is determined by adding the cost in the beginning Work in Process Inventory and the costs incurred in the current period and subtracting the cost of goods transferred out of the department
B. It is the actual costs incurred plus the costs added during the period
C. It is always greater than the costs transferred into the department
D. It is greater than the ending inventory in the previous process department
As it pertains to the ending Work in Process Inventory, the following is true: A. It is determined by adding the cost in the beginning Work in Process Inventory and the costs incurred in the current period and subtracting the cost of goods transferred out of the department.
Work-in-process inventory is an inventory account in which all unfinished products are classified. This account represents the unfinished products that are still in production and have not yet been completed.
The ending WIP Inventory is determined by adding the cost in the beginning WIP Inventory and the costs incurred in the current period.
This means that the account takes into account the costs associated with unfinished products that were carried over from the previous accounting period, as well as the costs incurred during the current period of production.
The costs included in the WIP Inventory typically consist of both direct materials and direct labor expenses.
Direct materials refer to the raw materials or components that are directly used in the production process, while direct labor refers to the wages or salaries of the workers involved in manufacturing the products.
The WIP Inventory is considered a current asset in the balance sheet of the company. It represents the value of the partially completed products that are still undergoing production.
This inventory account is classified as a current asset because it is expected that the unfinished products will be completed and sold within a relatively short period of time.
This account contains both material and labor expenses and is shown as a current asset in the balance sheet of the firm.
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Identify variables that could be used to predict demand and production. Include at least one variable from each of the following three categories: Macroeconomic variables that might impact demand and/or supply in the industry. A good place to start would be the list of economic indicators included in this week’s materials. Demographic variables. A good place to start would be the Census Bureau. Consider what these demographics tell you about the potential customers of the business you are describing. Production characteristics in this industry such as economies of scale, economies of scope, and/or any unique production characteristics that might apply. Some good places to start would be the websites of companies in the industry or industry association websites and publications. For each of the variables you identify, indicate what impact it has on production costs and potential profit, customer demand, the economic environment the business would exist in, and any other impacts you determine would be important in predicting production costs and demand. Categories: Macroeconomic variables that might impact demand and/or supply in the industry. A good place to start would be the list of economic indicators included in this week’s materials. Demographic variables. A good place to start would be the Census Bureau. Consider what these demographics tell you about the potential customers of the business you are describing. Production characteristics in this industry such as economies of scale, economies of scope, and/or any unique production characteristics that might apply. Some good places to start would be the websites of companies in the industry or industry association websites and publications.
Macroeconomic variables that might impact demand and/or supply in the industry include interest rates, GDP, exchange rates, inflation, and so on. The price of a commodity or a good and the amount of it that customers demand are influenced by these variables.
Demographic variables:
Demographic variables that may impact demand include age, gender, educational level, income, ethnicity, and more. In other words, demand can be determined by the demographic characteristics of the customers.
Production characteristics in this industry:
Production characteristics in this industry include economies of scale, scope, and any unique production characteristics that may apply. Production costs, customer demand, and the economic environment in which the company exists will all be affected by production characteristics.
Economies of Scale:
If a company is capable of achieving economies of scale, it can significantly reduce its production costs. This is accomplished by maximizing output while minimizing input, which leads to lower average costs per unit of production.
Economies of Scope:
Economies of scope exist when a company can produce a range of products more cheaply than producing each product separately. As a result, the company can achieve cost savings by producing more products under one roof than by producing each one separately.
Both economies of scale and scope may help to increase profitability and reduce production costs, which could potentially increase demand and supply by lowering prices.
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bond prices and maturity dates. Moore Company is about to issue a bond with a quarterly coupon payments, an annual coupon rate of 7%, and par value of $1,000. The yield to maturity for this bond is 10%.
a. What is the price of the bond if it matures in 10,20,25, or 30 years?
b. What do you notice about the price of the bond in relationship to the maturity of the bond?
a) The bond price can be calculated using the present value formula, adjusting for coupon payments and yield to maturity, for different maturity dates.
b) The bond price decreases as maturity increases due to the higher discounting of future cash flows at a higher yield to maturity, making them less valuable in present terms.
a) To calculate the price of the bond, we can use the formula for the present value of a bond's cash flows. The formula is:
Bond Price = (C / (1 + r)^1) + (C / (1 + r)^2) + ... + (C / (1 + r)^n) + (F / (1 + r)^n)
Where:
C = coupon payment
r = yield to maturity
n = number of periods (quarters)
Given that the bond has quarterly coupon payments, an annual coupon rate of 7% (or 0.07 in decimal form), and a par value (F) of $1,000, we can calculate the price of the bond for different maturity dates.
For a maturity of 10 years (40 quarters):
Bond Price = (0.07 * 1000 / (1 + 0.10 / 4)^1) + (0.07 * 1000 / (1 + 0.10 / 4)^2) + ... + (0.07 * 1000 / (1 + 0.10 / 4)^40) + (1000 / (1 + 0.10 / 4)^40)
Repeat the same calculation for maturities of 20, 25, and 30 years.
b) As we analyze the relationship between the price of the bond and its maturity, we can observe that the price decreases as the maturity of the bond increases. This inverse relationship is due to the impact of the yield to maturity on the present value of future cash flows.
When the yield to maturity is higher than the coupon rate (as in this case), the discounted cash flows have a larger impact on the bond's price. Since the bond's future cash flows are discounted at a higher rate for a longer maturity, their present value decreases, resulting in a lower bond price.
In other words, the longer the bond's maturity, the more sensitive it is to changes in interest rates. Higher yields to maturity make the bond's future cash flows less valuable in present terms, leading to a decrease in the bond price.
In summary, the price of the bond decreases as the maturity of the bond increases due to the higher discounting of future cash flows at a higher yield to maturity.
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Mireille han complementary health incurance progection under her group insurance plan. Her son had anaceident while thay hing hiskry and yonerwat dental work that cost $3,650. The insurer reimbursed 33,350 ance Mireille had paid the first 3300 of the elaim Why did Mireille have to pay $300? Because of a deductible. Decause of a premiurn rating Because of a limitation. Becaure of an exclusion.
Mireille had to pay $300 because of a deductible. A deductible is the initial amount of money that the insured individual is responsible for paying before the insurance company begins to cover the remaining expenses.
In this case, the deductible was $300, and Mireille had to pay this amount before the insurer reimbursed her for the rest of the claim.
Deductibles are commonly used in insurance plans to help control costs and ensure that individuals have some financial responsibility for their healthcare expenses. It is important to review the terms of your insurance plan to understand the specifics of your deductible and how it applies to different types of medical expenses.
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In 1967 , an earner in the bottom fifth was earning 9% of a top-fifth earner's income. In dollar terms, the bottom-fifth worker was earning $9,850. By 2020 , the bottom fifth earner was earning 6% of the top-fifth earner and the bottom-fifth worker's income was 14,600. Find the top-fifth worker's income in 1967. In 1967, an earner in the bottom fifth was earning 9% of a top-fifth earner's income. In dollar terms, the bottom-fifth worker was earning $9,850. By 2020, the bottom fifth earner was earning 6% of the top-fifth earner and the bottom-fifth worker's income was 14,600. Find the top-fifth worker's income in 2020.
To find the top-fifth worker's income in 1967, we can set up a proportion using the given information. Let's represent the top-fifth worker's income in 1967 as "x".
We know that the bottom-fifth worker's income in 1967 was $9,850, which is 9% of the top-fifth earner's income.
Setting up the proportion, we have:
(9/100) * x = 9,850
To solve for x, we can multiply both sides of the equation by 100/9:
x = (9,850 * 100) / 9
x = 108,888.89
Therefore, the top-fifth worker's income in 1967 was approximately $108,888.89.
To find the top-fifth worker's income in 2020, we can again set up a proportion using the given information. Let's represent the top-fifth worker's income in 2020 as "y".
We know that the bottom-fifth worker's income in 2020 was $14,600, which is 6% of the top-fifth earner's income.
Setting up the proportion, we have:
(6/100) * y = 14,600
To solve for y, we can multiply both sides of the equation by 100/6:
y = (14,600 * 100) / 6
y = 243,333.33
Therefore, the top-fifth worker's income in 2020 was approximately $243,333.33.
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Question 1 If good X is measured on the horizontal axis and good Y on the vertical, what can you say about the preferences of someone whose indifference curves are described below?
(i) parallel to the Y axis? (5 pts)
(ii) upward sloping with utility increasing as one moves to the right? (5 pts)
(iii) downward sloping with utility increasing as one moves to bottom-left? (5 pts)
1. Indifference curves parallel to the Y-axis suggest a constant rate of substitution and indifference between different combinations of goods X and Y.
2. Upward-sloping indifference curves indicate a positive marginal rate of substitution, with the individual willing to trade more units of Y for additional units of X.
3. Downward-sloping indifference curves imply a negative marginal rate of substitution, with the individual willing to exchange some units of X for more units of Y.
For each of the three scenarios described, here is what we can say about the preferences of the individual:
1. If the indifference curves are parallel to the Y-axis, it means that the individual has a constant rate of substitution between goods X and Y. This suggests that the individual is indifferent between different combinations of goods X and Y, as long as the ratio between the two goods remains the same.
2. If the indifference curves are upward sloping and utility increases as one moves to the right, it indicates that the individual has a positive marginal rate of substitution between goods X and Y. In other words, the individual is willing to give up some units of good Y to obtain more units of good X, while maintaining the same level of utility.
3. If the indifference curves are downward sloping and utility increases as one moves to the bottom-left, it implies that the individual has a negative marginal rate of substitution between goods X and Y. This means that the individual is willing to give up some units of good X to obtain more units of good Y, while keeping the same level of utility.
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Compute the present value of the following, if the money is worth 12% compounded quarterly and n=5;
a. P1.00 received monthly in year n
b. P1.00 received monthly for n years
Answers:
(a) P7.02
(b) P45.08
(a) The present value of P1.00 received monthly in year 5 is approximately P7.02 ,(b) The present value of P1.00 received monthly for 5 years is approximately P45.08.
To compute the present value of cash flows, we can use the formula for present value of an annuity:
PV = C * (1 - (1 + r)^(-n)) / r
Where PV is the present value, C is the cash flow, r is the interest rate per compounding period, and n is the number of compounding periods.
For part (a), we have a cash flow of P1.00 received monthly in year n. Since the money is compounded quarterly at a rate of 12%, the interest rate per compounding period is 12% / 4 = 3%. The number of compounding periods is n = 5 years * 4 quarters/year = 20 quarters
Using the formula, we can calculate the present value:
PV = 1 * (1 - (1 + 0.03)^(-20)) / 0.03
PV ≈ 7.02
Therefore, the present value of P1.00 received monthly in year 5 is approximately P7.02.
For part (b), we have a cash flow of P1.00 received monthly for n years. The interest rate per compounding period and the number of compounding periods remain the same.
Using the formula, we can calculate the present value:
PV = 1 * (1 - (1 + 0.03)^(-20)) / 0.03
PV ≈ 45.08
Therefore, the present value of P1.00 received monthly for 5 years is approximately P45.08.
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if
the marginal rate of substitution of leisure for consumption
(MRS1.c) is 3, what does this imply on the relative value of
leisure to consumption?
In this case, if the MRS1.c is 3, it implies that the individual is willing to give up 3 units of leisure in order to obtain 1 unit of additional consumption.
The marginal rate of substitution of leisure for consumption (MRS1.c) refers to the rate at which an individual is willing to give up leisure time in exchange for additional consumption.
This suggests that the individual values leisure less than consumption. The higher the MRS1.c, the less an individual values leisure compared to consumption. In other words, the individual is willing to sacrifice more leisure time to gain additional consumption.
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If the MRS1.c is 3, it implies that the individual values leisure more than consumption. The relative value of leisure is higher compared to consumption, meaning that the individual is willing to give up more consumption to gain additional leisure time.
The marginal rate of substitution of leisure for consumption (MRS1.c) refers to the amount of consumption a person is willing to give up in order to gain an additional unit of leisure time. In this case, if the MRS1.c is 3, it implies that the individual is willing to give up 3 units of consumption in exchange for one unit of leisure time.
To understand the relative value of leisure to consumption, we need to compare the MRS1.c to the ratio of the prices of leisure and consumption. Let's assume the price of leisure is represented by PL and the price of consumption is represented by PC.
If MRS1.c = 3, it means that the individual is willing to give up 3 units of consumption for one unit of leisure. In other words, the price of leisure (PL) is 3 times lower than the price of consumption (PC). This indicates that the individual values leisure more than consumption, as they are willing to sacrifice more consumption to gain leisure.
For example, if the price of consumption (PC) is $10 per unit and the MRS1.c is 3, it means that the individual values one unit of leisure as if it costs $30 (3 units of consumption x $10 per unit). This implies that the relative value of leisure is higher compared to consumption.
Therefore, if the MRS1.c is 3, it implies that the individual values leisure more than consumption. The relative value of leisure is higher compared to consumption, meaning that the individual is willing to give up more consumption to gain additional leisure time.
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Consider the following transactions for Laple Meaf Corporation:
a. Hockey Helpers paid $4,000 cash on September 30, to rent an arena for the months of October and November.
b. Super Stage Shows received $16,000 on September 30, for season tickets that admit patrons to a theatre event that will be held twice (on October 31 and November 30).
c. Risky Ventures paid $3,000 on September 30, for insurance coverage for the months of October, November, and December.
Q: For each of the following independent situations, prepare journal entries to record the initial transaction on September 30 and the adjustment required on October 31.
The journal entry to record the initial transaction on September 30:
a. Cash (or Prepaid Rent) 4,000
Rent Expense 4,000
To record the initial transaction on September 30:
a. Cash (or Prepaid Rent) 4,000
Rent Expense 4,000
b. Cash (or Accounts Receivable) 16,000
Unearned Revenue 16,000
c. Prepaid Insurance 3,000
Cash (or Accounts Payable) 3,000
To record the adjustment required on October 31:
a. Rent Expense 2,000
Prepaid Rent 2,000
b. Unearned Revenue 8,000
Ticket Revenue 8,000
c. Insurance Expense 1,000
Prepaid Insurance 1,000
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In terms of IT development and advancement (R&D), what is the role of CHINA country in triggering a REVOLUTION in the management of a IT business?
China's focus on R&D, large market, government support, and entrepreneurial ecosystem has triggered an IT management revolution, driving innovation, agility, customer-centricity, and digitalization in the industry.
China has played a significant role in triggering a revolution in the management of IT businesses through its emphasis on research and development (R&D) in the technology sector. The country's large market, government support, investment in infrastructure, and talent pool have fostered innovation, leading to advancements in areas such as artificial intelligence, e-commerce, and telecommunications.
China's entrepreneurial ecosystem, characterized by fierce competition, rapid market adoption, and a mobile-first approach, has driven IT companies to adopt agile management practices, customer-centric strategies, and disruptive business models.
Additionally, China's strong focus on digitalization and its ability to scale technologies quickly have influenced global trends in IT management, shaping new paradigms and challenging traditional business approaches.
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Briefly describe the weakness of MM's theory and how trade-off
theory overcomes the weakness in determining the optimal capital
structure.
The weakness of MM's theory, also known as Modigliani-Miller theory, is that it assumes perfect capital markets and ignores the impact of taxes, bankruptcy costs, and other factors on the optimal capital structure.
This theory states that the value of a firm is independent of its capital structure.
On the other hand, trade-off theory recognizes that there are costs and benefits associated with different levels of debt. It acknowledges that there is an optimal capital structure that balances the tax advantages of debt with the costs of financial distress. In other words, trade-off theory takes into consideration factors such as tax shields, bankruptcy costs, and agency costs when determining the optimal capital structure. It suggests that firms should aim to find a balance between the benefits and costs of debt to maximize value. The weakness of MM's theory, also known as Modigliani-Miller theory, is that it assumes perfect capital markets and ignores the impact of taxes, bankruptcy costs, and other factors on the optimal capital structure.
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Focusing on the EV (electric vehicles) market, explain how the following five events attect the dernand or the supply side of the EV cars. Drawing diagrams, explain, In one sentence, what happens to the equilibrium price and quantity of EV cars in each of these cases. (10 points) a. Price of cobalt (used in batteries for electric cars) rises b. Per-capita income rises c. Price of gas rises d. Application of advanced technology in EV production fowers the cost of EV production e. Because of the zero-carbon emission goal, the government subsidizes EV car production. 2. Briotly distinguish between economic elects of price ceiling and price floor. ( 5 points)
The effects of price floors are as follows: it leads to a surplus of the product; it increases the supply; it decreases the demand; it encourages suppliers to produce more of the good.
a. Price of cobalt (used in batteries for electric cars) rises:
It will increase the cost of production of electric cars and will lead to an increase in their prices. Thus, the supply curve will shift to the left resulting in a decrease in the quantity demanded while the equilibrium price increases.
b. Per-capita income rises:
An increase in per-capita income will lead to an increase in the demand for electric cars. Thus, the demand curve will shift to the right resulting in an increase in the equilibrium price and quantity.
c. Price of gas rises:
An increase in the price of gas will lead to an increase in the demand for electric cars. Thus, the demand curve will shift to the right resulting in an increase in the equilibrium price and quantity.
d. Application of advanced technology in EV production lowers the cost of EV production:
Lowering of cost of production of EVs will lead to an increase in supply resulting in an increase in the quantity demanded while the equilibrium price decreases.
e. Because of the zero-carbon emission goal, the government subsidizes EV car production:
Subsidization of EV car production will lower the cost of production of EVs, leading to an increase in supply, resulting in an increase in quantity demanded while the equilibrium price decreases.
Economic effects of price ceiling and price floor:
Price ceiling is the maximum price set by the government below the market equilibrium price to make it affordable for consumers. Price floor is the minimum price set by the government above the market equilibrium price to ensure that producers get a fair price for their products.
The effects of price ceilings are as follows:
it leads to a shortage of the product; it decreases the supply; it increases the demand; it discourages suppliers from producing more of the good.
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A local bank offers a CD with and APR of 8.89 percent that compounds monthly. What is the effective annual rate on the CD? Answer should be formatted as a percent with 2 decimal places (e.g. 99.99).
The effective annual rate on the CD is 9.33 percent.
The effective annual rate (EAR) on the CD is calculated using the formula:
EAR = (1 + (APR/n))ⁿ - 1
Where APR is the annual percentage rate and n is the number of compounding periods per year. In this case, the APR is 8.89 percent and the CD compounds monthly, so there are 12 compounding periods per year.
Substituting the values into the formula:
EAR = (1 + (0.0889/12))^¹² -1
= (1.0074)^¹² -1
= 1.0933 - 1
= 0.0933
To express the EAR as a percentage with two decimal places, we multiply by 100:
EAR = 0.0933 × 100
= 9.33%
Therefore, the effective annual rate on the CD is 9.33 percent.
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In March 2012, Daniela Motor Financing (DMF), offered some securities for sale to the public. Under the terms of the deal, DMF promised to repay the owner of one of these securities $1,000 in March 2037, but investors would receive nothing until then. Investors paid DMF $500 for each of these securities; so they gave up $500 in March 2012, for the promise of a $1,000 payment 25 years later.
Investors paid $500 in March 2012 for DMF's securities, with the promise of receiving $1,000 in March 2037 after a 25-year period.
In March 2012, Daniela Motor Financing (DMF) offered securities to the public. Investors purchased these securities by paying $500 each. The terms of the deal stated that DMF would repay the owner of each security $1,000 in March 2037, which means investors would have to wait for 25 years to receive the payment. This arrangement allowed DMF to raise funds upfront while providing investors with the promise of a significant return on their investment in the future.
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Publications that are currently issued by the CRA to provide detalled information about speciffe fopics within the Income Tax Act are callod Choose the correct answer. A. Income Tax Folios B. Technical Interpretations C. Income Tax Technical News D. Electronic Libraries
Publications that are currently issued by the CRA to provide detailed information about specific topics within the Income Tax Act are called Income Tax Folios. The correct answer is A. Income Tax Folios.
Income Tax Folios are publications issued by the Canada Revenue Agency (CRA) that provide detailed information and interpretations about specific topics within the Income Tax Act. They are comprehensive and authoritative resources that help taxpayers and tax professionals understand and apply the tax laws correctly. Income Tax Folios cover various subjects and guide the interpretation of tax legislation, CRA administrative policies, and relevant case law. They aim to enhance consistency and clarity in the application of tax laws. The other options provided are not publications issued explicitly by the CRA for detailed information about specific topics within the Income Tax Act: B. Technical Interpretations: The CRA provides written responses to specific technical questions posed by taxpayers or tax professionals. They guide the CRA's tax law interpretation based on the facts and circumstances presented. C. Income Tax Technical News: No publication is specifically called "Income Tax Technical News" issued by the CRA. However, the CRA may release news updates, bulletins, or information circulars to communicate significant changes or updates related to income tax matters. D. Electronic Libraries: Electronic libraries may refer to online resources or databases that contain various tax-related information, including legislation, case law, interpretive materials, and other publications. While these libraries may include CRA publications, they are not explicitly issued by the CRA. Therefore, the correct answer is A. Income Tax Folios, as they are the publications issued by the CRA to provide detailed information about specific topics within the Income Tax Act.
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Takunda (Pty) (Takunda) Ltd is a cleaning company. Customers’ windows are cleaned monthly, the window cleaner then posts a stamped addressed envelope for payment through the customer’s front door. SHW has a large number of receivable balances, and these customers pay by cheque or cash, which is received in the stamped addressed envelopes in the post.
The following procedures are applied to the cash received cycle:
1. A junior clerk from the accounts department opens the post and if any cheques or cash have been sent, she records the receipts in the cash received log and then places all the monies into the locked small cash box.
2. The contents of the cash box are counted each day and every few days these sums are banked by whichever member of the finance team is available.
3. The cashier records the details of the cash received log into the cash receipts daybook and updates the sales ledger.
4. Usually on a monthly basis, the cashier performs a bank reconciliation, which he then files, if he misses a month then he catches this up in the following month’s reconciliation.
For the cash cycle of Takunda (Pty) Ltd:
These procedures ensure proper control and documentation of cash received by Takunda (Pty) Ltd.
The cash cycle of Takunda (Pty) Ltd involves the following steps:
Receipt of Cash: Customers send their payment (cheques or cash) through the stamped addressed envelopes left by the window cleaner. A junior clerk from the accounts department opens the post and records the receipts in the cash received log.
Counting and Banking: The contents of the cash box are counted each day, and every few days the sums are banked by a member of the finance team who is available.
Recording in Cash Receipts Daybook: The cashier, who is responsible for handling cash transactions, records the details from the cash received log into the cash receipts daybook.
Bank Reconciliation: The cashier performs a monthly bank reconciliation, comparing the company's records with the bank statement to ensure that the recorded cash transactions match the bank transactions.
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Sunrise Ltd. dealing readymade garments is planning to expands its business operations to cater to international market. For this purpose , the company needs additional Rs.800,000 for replacing machines with modern machinery with higher productions capacity.It involves committing the finance on a longterm basis. These decisions are very crucial for any business since they affect its earning capacity in the long run. The company wishes to raise the required funds by issuing debentures. The debt can be issued at an estimated costs of 10% . Instead of issuing 10% . Debenture the company can issue Equity Shares for raising the fund. The financial manager of the company would normally opt for a source which is the cheapest. Identify the problem
2.Think of a solution of the problem(set of alternatives to solve the problem)
3. Evaluate each alternative (advantages and disadvantages)
4. Select the best alternatives
5. Conclusion and recommendation of the alternative chosen
6.what is the role of financial manager during this case?
How the financial management contributed to solve the case?
The financial manager evaluates cost-effective funding options, comparing debentures and equity shares. The chosen option aligns with financial goals and maximizes shareholder value.
In this case, the problem is deciding whether to raise funds through issuing debentures or equity shares to finance the expansion plans of Sunrise Ltd. The financial manager's role is to analyze and evaluate the alternatives to determine the most cost-effective option.
Possible solutions include issuing debentures at a 10% interest rate or issuing equity shares.
Advantages of issuing debentures include lower interest costs compared to equity shares and the ability to maintain control over the company. Disadvantages include the obligation to make fixed interest payments and potential risk if the company faces financial difficulties.
On the other hand, issuing equity shares may allow the company to raise funds without incurring interest costs and may attract potential investors. However, it dilutes ownership and control, and dividends must be paid to shareholders.
To evaluate the alternatives, the financial manager needs to compare the costs and benefits of each option. They would consider factors such as the company's financial position, cash flow projections, and long-term growth prospects.
After evaluating the alternatives, the financial manager can select the best option based on the company's financial goals, risk tolerance, and cost considerations.
In this case, if the financial manager determines that the cost of issuing debentures (10% interest) is lower than the cost of issuing equity shares, they may recommend issuing debentures to raise the required funds.
Financial management plays a crucial role in assessing the financial viability of different options, considering the impact on the company's profitability, cash flow, and long-term sustainability. By carefully analyzing the alternatives, the financial manager can contribute to making an informed decision that aligns with the company's financial objectives.
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67%+of+us+households+own+a+pet.+if+2+households+are+selected+at+random,+what+is+the+probability+that+the+first+household+owns+a+pet,+and+the+second+one+does+not?
The probability that the first household owns a pet, and the second one does not is 0.2211. The correct option is b.
Given,
P(House hold that have pet) = 0.67
P (Household that that does not have ped) = 1-06 7 = 0.33
p(house had have pet and not have pet)
= p(household have pet) p(hour hold not have pet)
=0.67 0.33 = 0.2211
A probability is a number that reflects how likely an event is to occur. It is expressed as a number between 0 and 1, or as a percentage between 0% and 100% in percentage notation. The higher the likelihood, the more probable the event will occur. The probability of an impossible occurrence is 0; the probability of a certain event is 1.
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The question is incomplete, but the complete question most probably was:
67% of US households own a pet. If 2 households are selected at random, what is the probability that the first household owns a pet, and the second one does not?
a.0.4422
b. 0.2211
c. 06700
d. 0.4489
During the period where U.S. had economic sanction placed on Sudan, an Asian Oil Trader bought crude oil from the Sudan National Oil Company. The Asian Oil Trader instructed its banker, Citibank N.A. Singapore branch to make JPY payment. The Sudanese Seller claimed that they did not receive the funds. What could be the reason for this outcome? Sudan and Singapore are on different time zone and it takes more time for Sudanese party to receive payment Citibank N.A. Singapore Branch committed an operational error and did not make payment to Sudanese party Citibank N.A. Singapore Branch is able only to remit Singapore Dollar Citibank N.A. is a U.S. bank and therefore had to observe the economic sanction and unable to remit funds to Sudanese party Question 20 In 2019 the USA is still the world's largest economy and has the world's most powerful military. In its effort to force Iran to conform to American agenda, the US continued to impose economic sanction on Iran. Banks and Shipping Companies must be vigilant that their customers do not trade and ship goods to Iran. Any infringements by Banks and Shipping Companies are met with punitive measures by America and her allies. Given the presence of international banks and shipping companies in the U.S. and recent experience of international banks paying huge fines for various infringements, sanction imposition has proven to be very effective in denying Iran of both exports and imports. Banks are careful to monitor the trading activities of their customers. If customers are found to be in breach of sanctions ruling. Banks would withdraw financing support to these customers, causing some to go out of business. As a result, major traders have policies and procedures to ensure not selling to sanction countries so as to maintain banking support and use of trade finance facilities they need to conduct trade. Is this statement TRUE or FALSE? True False
The statement is true. Major traders have policies and procedures in place to ensure they do not sell to sanctioned countries.
The reason for the Sudanese Seller not receiving the funds could be that Citibank N.A. Singapore Branch committed an operational error and did not make the payment to the Sudanese party. Since the U.S. had economic sanctions placed on Sudan, Citibank N.A., being a U.S. bank, would have had to observe the economic sanction and would not be able to remit funds to the Sudanese party. This means that the Asian Oil Trader's instructions to make JPY payment would not have been carried out by the bank due to the economic sanctions. Therefore, the most likely reason for the outcome is that Citibank N.A. Singapore Branch did not make the payment to the Sudanese Seller.
Regarding the statement, it is true that banks and shipping companies must be vigilant that their customers do not trade and ship goods to Iran, as the U.S. has continued to impose economic sanctions on Iran. Infringements by banks and shipping companies are met with punitive measures by the U.S. and its allies. Major traders have policies and procedures in place to ensure they do not sell to sanctioned countries, as this allows them to maintain banking support and use trade finance facilities needed to conduct trade. Therefore, the statement is true.
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Under the assumption that KXS's market share will be 0.28% higher in each subsequent year, you determine that the plant wil require an oxpansion in 2020 . The expantion wil cost $20.3milign. Assuming that the financing of the expansion will be delayed accordingly (end of 2020), calculate the projected interest payments and the anount of the projected ialerest tax theids through 2023 (assuming that KOS stif uses a 10-year bond, interest rates femain the same at 6.6%, and KOC55 tax rale is 35\%). The lotal projected interest payments starting in 2021 will be ? (Round to the nearest dollar.)
The total projected interest payments starting in 2021 would be $4.0194 million, and the projected interest tax savings would be approximately $1.40779 million.
To calculate the projected interest payments and the amount of projected interest tax savings through 2023, we need to consider the financing of the expansion and the interest rate.
The expansion cost is $20.3 million, and assuming it is financed through a 10-year bond, we can calculate the projected interest payments starting in 2021. The annual interest rate is 6.6%.
To find the projected interest payments, we need to calculate the interest expense each year and sum them up. The interest expense is calculated as the expansion cost multiplied by the annual interest rate. Here's the breakdown:
2021: $20.3 million × 6.6% = $1.3398 million
2022: $20.3 million × 6.6% = $1.3398 million
2023: $20.3 million × 6.6% = $1.3398 million
The total projected interest payments starting in 2021 would be:
$1.3398 million + $1.3398 million + $1.3398 million = $4.0194 million
To calculate the projected interest tax savings, we multiply the interest expense by the tax rate. The tax rate is 35%.
Projected interest tax savings:
$4.0194 million × 35% = $1.40779 million
Therefore, the total projected interest payments starting in 2021 would be approximately $4.0194 million, and the projected interest tax savings would be approximately $1.40779 million.
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An insurance company wishes to insure a $30,000 vehicle. The company estimates that a total loss will occur with probability .017 over the next year; the probability of a 50% loss will occur with probability .065 over the next year; and the probability of a 25% loss will occur with probability .079 over the next year. What yearly premium should the company set in order to average a profit of $500 per policy?
The yearly premium the insurance company should set to average a profit of $500 per policy is $748.
By calculating the expected profit per policy, considering the probabilities of different loss scenarios, and subtracting the desired profit, we find that the premium should be set at $748 to achieve an average profit of $500 per policy. This premium takes into account the likelihood of various losses occurring over the next year. Let's denote the premium as P. The expected profit per policy can be calculated as follows: Expected Profit = (Probability of Total Loss * Total Loss) + (Probability of 50% Loss * 50% Loss) + (Probability of 25% Loss * 25% Loss) - P.
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As CruMan grows it needs additional facilities. Key executives and outside investors pool personal funds to form a real estate partnership to purchase an existing warchouse for long-term lease to CruMan. The partners collectively contribute $200,000 of personal cash while an attorney contributes legal services in the following amounts. a) Record the journal entry for establishment of the partnership capital balances using the bonus method b) Record the the journal entry for establishment of the partnership capital balance using the goodwill method
a) When establishing the partnership capital balances using the bonus method, the journal entry would be as follows:
Debit: Warehouse Asset (for the purchase price of the warehouse)
a) When establishing the partnership capital balances using the bonus method, the journal entry would be as follows:
Debit: Warehouse Asset (for the purchase price of the warehouse)
Credit: Capital Accounts of Key Executives and Outside Investors (for their contributions)
Credit: Capital Account of Attorney (for the value of legal services provided)
b) When establishing the partnership capital balances using the goodwill method, the journal entry would be as follows:
Debit: Warehouse Asset (for the purchase price of the warehouse)
Debit: Goodwill (for the excess of the purchase price over the fair value of the net assets acquired)
Credit: Capital Accounts of Key Executives and Outside Investors (for their contributions)
Credit: Capital Account of Attorney (for the value of legal services provided)
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Can an employee survive in an organization if he or she rejects its core values ? Explain .
No, an employee cannot survive in an organization if they reject its core values. Core values serve as the guiding principles and beliefs that shape the organizational culture and define its identity.
No, an employee may not be able to survive in an organization if they reject its core values. Core values are the fundamental beliefs and principles that guide the organization's culture, decision-making, and behavior. If an employee rejects these core values, it can create conflicts, undermine teamwork, and hinder organizational cohesion. In addition, employees who go against the core values may find it difficult to align with the organization's goals and objectives, leading to decreased job satisfaction and potential performance issues.
Organizations value employees who demonstrate a commitment to their core values as it fosters a sense of shared purpose, unity, and a positive work environment. Thus, rejecting core values can strain relationships, limit career growth opportunities, and ultimately impact an employee's long-term viability within the organization.
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Starting in 2008, the United States experienced the greatest economic calamity since the Great Depression. To combat rising unemployment, negative economic growth, and deflation, among other problems, the U.S. government employed instruments/policies from both the fiscal and monetary tool kits Describe the major problems of the "Great Recession." What required immediate government action, from the perspective of many public officials? Monetary policy: Describe how the Federal Reserve respond to the crisis. Be sure to discuss interest rates and open market operations. Fiscal policy: Describe Congress’s response to the crisis. Be sure to discuss the American Recovery and Reinvestment Act of 2009.
Explain the goals of the fiscal and monetary policies employed. Address "stimulating aggregate demand" and the role of "increasing the money supply" in your response. Evaluate the success in the policies.
The major problems of the Great Recession were rising unemployment, negative economic growth, deflation, and a decline in consumer spending. From the perspective of many public officials, immediate government action was required to stimulate the economy and restore confidence.
In response to the crisis, the Federal Reserve employed expansionary monetary policy. They reduced interest rates to near zero to encourage borrowing and investment. Additionally, they conducted open market operations by purchasing Treasury securities to inject liquidity into the financial system and increase the money supply.
Congress responded to the crisis with the American Recovery and Reinvestment Act of 2009. This fiscal policy involved a combination of government spending and tax cuts to stimulate aggregate demand. The goal was to boost economic activity, create jobs, and restore consumer confidence.
The fiscal and monetary policies employed aimed to stimulate aggregate demand. Fiscal policy focused on increasing government spending to directly stimulate demand, while monetary policy aimed to increase the money supply to encourage borrowing and spending.
The success of these policies can be evaluated based on the outcomes. The Great Recession eventually ended, and the economy recovered, although the pace of recovery varied.
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Classify the items below under the categories that follows.
Items:
i. Forward exchange contract
ii. Purchased trademark
iii. Debentures held
Categories:
- Financial asset
- Financial liability
- Derivative instrument
- Not a financial instrument (neither a financial asset, financial liability, nor a derivative instrument).
The classification of the given items under the given categories is as follows:
i. Forward exchange contract - Derivative instrument
ii. Purchased trademark - Financial asset
iii. Debentures held - Financial liability
A forward exchange contract is a derivative contract. A forward contract is defined as a transaction that involves a contract to buy or sell an underlying asset at a future date at a fixed price. They are known to be of two types namely, outright forward contracts (settled through the delivery of underlying assets) and non-deliverable forward contracts (cash-settled). Hence, it falls under the category of derivative instruments.
Financial assets are any asset that generates cash flow and has value. They are classified into three categories namely, equity, cash and cash equivalent, and contractual assets. A purchased trademark is an asset purchased by an individual or a company. It is categorized under financial assets.
Financial liabilities are any financial obligation or economic duty that an entity owes to another entity. They are classified into two categories namely, contractual liabilities and equity derivatives. Hence, Debentures held are categorized under financial liability.
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Topic: MNEs that pursue transnational strategies perform better.
Take a stand, and give 3-4 arguments in point form for each stand.
Transnational strategies can lead to better performance for multinational enterprises (MNEs) due to enhanced global market access, cost efficiency, risk mitigation, and knowledge transfer.
MNEs that pursue transnational strategies have the advantage of accessing a wider global market, tapping into diverse consumer preferences, and leveraging economies of scale. This can result in increased sales and revenue. Additionally, transnational strategies enable MNEs to optimize resources by sourcing materials and labor from cost-effective locations, reducing production costs. By decentralizing operations, they can adapt to market conditions and mitigate risks associated with specific regions. Furthermore, transnational strategies facilitate the transfer of knowledge and innovation across borders, enhancing product/service offerings and fostering competitiveness. While individual success may vary, these factors contribute to the potential for better performance by MNEs employing transnational strategies.
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You recently attended an ISO 9001:2015, Quality Manager’s Course and upon return to your institution which is a Manufacturing Organisation, you have been tasked with the responsibility of leading a team of change agents that is expected to initiate the implementation of a Quality Management System (QMS) based on the ISO 9001:2015 standard.
REQUIRED:
Draft a speech for the Managing Director to be presented at an ISO 9001:2015 orientation workshop for all staff in the institution. [15 Marks]
Question Two
A property title search firm is contemplating using online software to increase its search productivity. Currently an average of 40 minutes is needed to do a title search. The researcher cost is K2.00 per minute. Clients are charged a fee of K400.00. Company A’s software would reduce the average search time by 10 minutes, at a cost of K3.50 per search. Company B’s software would reduce the average search time by 12 minutes at a cost of K3.60 per search. Which option would have the highest productivity in terms of revenue per Kwacha of input? [15 Marks]
-END-
Good morning all staff. I am pleased to inform you all that our company will be implementing a Quality Management System (QMS) based on the ISO 9001:2015 standard. I have personally attended the ISO 9001:2015 Quality Manager's Course and have gained knowledge on the importance of quality management systems. Therefore, I have been given the responsibility of leading a team of change agents who will help us initiate this change.
The ISO 9001:2015 standard will benefit us in many ways. It will help us enhance customer satisfaction by meeting customer requirements and exceeding their expectations. It will also help us to improve the efficiency and effectiveness of our operations and to continuously improve our processes and products. By implementing this QMS, we will also be able to comply with legal and regulatory requirements.
As part of the implementation process, we will need your full cooperation and support. The change agents will be working with all departments to identify areas for improvement and to develop procedures that meet the ISO 9001:2015 standard. All employees will be required to follow the new procedures and work instructions to ensure that we meet the requirements of the QMS.
We will be holding workshops and training sessions to ensure that everyone is familiar with the new processes. I urge you all to take this opportunity to learn and develop your skills as this will help us achieve our goals faster. The QMS will benefit us all and will help us to achieve our objectives of providing quality products and services to our customers.
I look forward to your support and cooperation. Thank you.
The speech draft should address the following:
What is the ISO 9001:2015 standard and what it is for?
What benefits will the company have by implementing the standard?
Who is responsible for leading the change agents?
What will be the role of the change agents?
What is expected of the staff and how can they support the implementation of the QMS?
How will the staff be trained to meet the requirements of the new processes?
What are the expected outcomes of the QMS implementation?
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Procedure-based activities are large-volume transactions where: a. each transaction has a relatively high cost or value. b. each transaction consists mainly of handling data. c. each transaction is well defined. d. All of the above
Procedure-based activities are large-volume transactions where each transaction is well defined. This However, these activities consist mainly of handling data is another correct option.
Therefore, the correct option is (d) all of the above.Procedure-based activities are the tasks that require a series of steps to complete. These activities are usually very time-consuming, and they need to be done accurately to obtain a correct output. Procedure-based activities are also known as process-oriented activities or tasks, and they typically involve a large volume of transactions or operations.
Every transaction is well defined and has a relatively high cost or value. Additionally, these transactions consist mainly of handling data. Therefore, the option (d) all of the above as all of these conditions should be met in procedure-based activities.
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"
We make adjusting entries before closing entries in order to update any temporary accounts before they are closed to retained earnings. True False"
The statement "We make adjusting entries before closing entries in order to update any temporary accounts before they are closed to retained earnings" is True.
Why do we make adjusting entries before closing entries?Closing entries are required to transfer the balances of the temporary accounts to the permanent accounts. Temporary accounts consist of revenue, expenses, and dividends. Because of the four accounts that aren't permanent, we call them temporary accounts.We make adjustments to the accounts during the accounting process. Before creating financial statements, we must adjust these balances. The purpose of adjusting entries is to make a note of transactions that have not yet been recorded in the accounting system by the accounting department.
Closing entries, on the other hand, are only made after all adjusting entries have been made and financial statements have been completed for a certain period. In a company's accounting records, these entries are used to transfer the balances of temporary accounts to permanent accounts. It is done to show that a company has zero balances in all of its temporary accounts at the end of an accounting cycle.
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3. Excess capacity adjustments Three Waters Co, had sales of $1,790,000 last year on fixed assets of $395,000, Given that Three Waters's fixed assets were being used at only 92% of cepocity, then the firm's fixed asset tumover ratio was How much sales could Three Waters Co. have supported w 4.532x
$2,237,500
$1,945,652
$2,334,782
$1,848,369
$2,237,500
$1,945,652
$2,334,782
$1,848,369
When you consider that Three Waters's fixed assets were being underused, what should be the firm's target fixed assets to sales ratio?
23.35%
20.30%
19.29%
24.36%
Suppose Three Waters is forecasting sales growth of 18% for this year. If existing and new fixed assets are used at 100% capacity, the firm's expected foxed assets tumover ratio for this year is 23.35%% 20,30% 19.29% 24.36% Suppose Three Waters is forecasting shm. 16% for this year. If existing and new fixed assets are used ot 100% capacity, the firm's expected fixed assets turnover ratio for this year is
The fixed asset turnover ratio measures how efficiently a company is using its fixed assets to generate sales. It is calculated by dividing sales by fixed assets.
Given that Three Waters Co had sales of 1,790,000 and fixed assets of 395,000, the fixed asset turnover ratio can be calculated as follows:
Fixed asset turnover ratio = Sales / Fixed assets
Fixed asset turnover ratio = 1,790,000 / 395,000
Fixed asset turnover ratio = 4.532
To find the sales that Three Waters Co could have supported with a fixed asset turnover ratio of 4.532, we can use the formula:
Sales = Fixed asset turnover ratio * Fixed assets
Sales = 4.532 * 395,000
Sales = 1,782,740
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