Assuming that a retail business with 50 stores is running, the main aim is to track how well the company is doing in achieving its objectives. Therefore, the metrics that the company's head and vice-presidents would need to monitor the business's progress are as follows.
Sales performance The main reason for running a retail business is to make profits. Hence, the company's head and vice-presidents need to track sales performance and profitability in the company. To evaluate this, the company's management should track the total amount of sales made in all its 50 stores.
Customer satisfaction Customer satisfaction is a key indicator of how well the company is serving its customers. Tracking this metric can help the company improve its product offerings, marketing strategies, and service delivery. Customer satisfaction can be measured using surveys or feedback forms.
Productivity metrics The company needs to monitor employee productivity to ensure the smooth running of its operations. Therefore, the company's head and vice-presidents should track metrics such as the number of employees working in each store, the number of hours they work, and their level of productivity.
Inventory Management The retail business requires inventory management to track the availability of goods and prevent stockouts. Therefore, the company's head and vice-presidents should track metrics such as the number of items sold, the number of items returned, the amount of stock held, and the time it takes to restock items.
Profit MarginThe company's profit margin can be calculated by dividing the total revenue earned by the total costs incurred. Therefore, the company's head and vice-presidents should track metrics such as the cost of goods sold, the cost of sales, and the overhead expenses. The metrics mentioned above will help the company's management track its progress towards achieving its goals and provide early indications of problems.
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NARRATIVE OF. Note: Certain transactions, such as those dealing with payroll, require detailed computational work before preparing the journal entry. These-transactions are explained initially in the narrative as they occur. Please refer- to the original transaction when preparing a subsequent similar transaction. Jan. 2→ Paid Salt Water Mall 59,200.00 for January: rent. Of this amount, 35% is for office. facilities and 65% is for factory facilities." 2→ Paid RWT⋅Advertising Agency. $1800.00-for: preparing → advertisements → in → focal: newspapers. 3→ Paid Hi-Foam Products Company $16,826.24. in payment of the December 31 balance.? 3→ Received a check - from Calm-Waters Board Corporation for the amount due (check AR schedule). % 4→ Paid Marine National-Bank $47,533.48 for: December payroll taxes payable as follows: Employees" → Income → Tax → Payable, \$28,353.78;- FICA. Tax Payable, \$17,928.88; Federal Unemployment - Tax, S438.38; - State Unemployment Tax, 5812.44.. Column Break 4→ Paid $13,946.72-for Income TaxPayable. 4→ Paid Coco PVC Company. \$21,428.00- in payment of the December 31 balance. ? 4. Applied $8,248.00 of direct materials (1679) and $18,240.00 of direct labor (Time Ticket No, 258) to Job. No, 1403, which willcomplete the job. Use the simplified rates of: 8% of gross pay for employees'. FICA tax and 15% of gross pay for employees' foderal income tax. When preparing the entry for applying direct labor, dehit Work in Process for the gross pay, and credit: Employes' Income Tax Payable and FICA Tax Payable for the appropriate amounta and Salaries Payable for net pay-9 Remember that employoes are paid on the last day of each month
Based on the provided narrative, here is the breakdown of the transactions:
1. January 2:
- Paid Salt Water Mall $59,200.00 for January rent. Of this amount, 35% is for office facilities, and 65% is for factory facilities.
2. January 2:
- Paid RWT Advertising Agency $1,800.00 for preparing advertisements in local newspapers.
3. January 3:
- Paid Hi-Foam Products Company $16,826.24 in payment of the December 31 balance.
4. January 3:
- Received a check from Calm-Waters Board Corporation for the amount due (refer to the Accounts Receivable schedule).
5. January 4:
- Paid Marine National Bank $47,533.48 for December payroll taxes payable as follows:
- Employees' Income Tax Payable: $28,353.78
- FICA Tax Payable: $17,928.88
- Federal Unemployment Tax: $438.38
- State Unemployment Tax: $812.44
6. January 4:
- Paid $13,946.72 for Income Tax Payable.
7. January 4:
- Paid Coco PVC Company $21,428.00 in payment of the December 31 balance.
8. January 4:
- Applied $8,248.00 of direct materials (Job No. 1679) and $18,240.00 of direct labor (Time Ticket No. 258) to Job No. 1403, completing the job. Use the simplified rates of 8% of gross pay for employees' FICA tax and 15% of gross pay for employees' federal income tax. Debit Work in Process for the gross pay, and credit Employees' Income Tax Payable and FICA Tax Payable for the appropriate amounts. Also, credit Salaries Payable for the net pay.
Please note that the information provided is based on the narrative and assumes the accuracy of the data.
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A summary of the transactions includes payments for rent, advertising agency services, outstanding balances, payroll taxes, income tax, and materials/labor allocation to Job No. 1403. Specific journal entries are not provided.
Based on the provided narrative, here is a summary of the transactions:
Jan. 2: Paid Salt Water Mall $59,200 for January rent. 35% of the amount is allocated to office facilities, and 65% is allocated to factory facilities.
Jan. 2: Paid RWT Advertising Agency $1,800 for preparing advertisements in local newspapers.
Jan. 3: Paid Hi-Foam Products Company $16,826.24, clearing the outstanding balance as of December 31.
Jan. 3: Received a check from Calm-Waters Board Corporation for the amount due according to the accounts receivable schedule.
Jan. 4: Paid Marine National Bank $47,533.48 for December payroll taxes payable, including Employees' Income Tax Payable ($28,353.78), FICA Tax Payable ($17,928.88), Federal Unemployment Tax ($438.38), and State Unemployment Tax ($812.44).
Jan. 4: Paid $13,946.72 for Income Tax Payable.
Jan. 4: Paid Coco PVC Company $21,428.00, settling the outstanding balance as of December 31.
Jan. 4: Applied $8,248.00 of direct materials and $18,240.00 of direct labor to Job No. 1403. Debit Work in Process for the gross pay and credit Employees' Income Tax Payable and FICA Tax Payable accordingly. Also, credit Salaries Payable for the net pay.
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Do you think it is possible to have a good organisational culture in a company with poor ethics?
Yes, it is possible to have a good organizational culture in a company with poor ethics. However, it is important to note that a good organizational culture is built on values such as integrity, honesty, and respect.
When a company has poor ethics, it can undermine these values and create a toxic work environment. Employees may feel demotivated, trust may be eroded, and collaboration may suffer. Over time, this can impact the overall culture and productivity of the organization.
Therefore, it is crucial for companies to prioritize and uphold strong ethical standards in order to cultivate a positive organizational culture. A company with poor ethics may need to address and rectify these issues in order to truly have a good organizational culture.
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Discuss the advantages and disadvantages of conducting a business as partnership. (15 marks)
Partnerships are a popular choice for many small businesses, but it is important to weigh the pros and cons carefully before entering into a partnership agreement.
A partnership is a business structure in which two or more individuals own and operate a business. A partnership may be formed by written or oral agreement, and the partners may divide profits, losses, and control of the business as agreed in the partnership agreement.
Partnerships, like any other form of business ownership, have both advantages and disadvantages, which are discussed below:
Advantages of conducting a business as partnership:
Easy to Form and Manage:
Partnerships are relatively simple and inexpensive to establish. They can be formed without the need for complex legal formalities, and the cost of formation is generally lower than for other business structures such as corporations.
Shared Responsibility:
Partnerships offer the advantage of shared responsibility for the business. Each partner brings their own unique skills, experience, and capital to the business, which helps to reduce risk and increase the chances of success.
Taxation:
Partnerships are not taxed as a separate entity, but instead, each partner reports their share of the partnership income on their individual tax returns. This results in a lower tax burden for the partnership and its partners.
Flexibility:
Partnerships are flexible in terms of the way profits and losses are divided, and the way decisions are made. This allows partners to adapt to changing circumstances and take advantage of new opportunities.
Disadvantages of conducting a business as partnership:
Limited Life:
Partnerships have a limited life, and they dissolve when one or more partners leave the business or die. This can create uncertainty for the remaining partners, and it can be difficult to attract new partners if the business is in decline.
Unlimited Liability:
Partners in a partnership are personally liable for the debts and obligations of the business. This means that their personal assets are at risk if the partnership is unable to pay its debts. This can be a significant disadvantage for partners who have substantial personal assets, as they may be exposed to a higher level of risk.
Decision-making:
Partnerships can be difficult to manage when there are disagreements among partners about the direction of the business. This can lead to delays in decision-making and, in some cases, can even result in the dissolution of the partnership.
In conclusion, a partnership has many advantages and disadvantages. The benefits of shared responsibility, easy formation, flexibility, and taxation are counter balanced by the risks of unlimited liability, limited life, and decision-making difficulties.
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As of June 30, 2022, Oriole Company has assets of $106000 and owner's equity of $31000. What are the liabilities for Oriole Company as of June 30, 2022? $137000 O $106000 O $31000 O $75000
The liabilities for Oriole Company as of June 30, 2022, amount to $75,000.
To determine the liabilities for Oriole Company as of June 30, 2022, we can use the basic accounting equation:
Assets = Liabilities + Owner's Equity
Given that the assets are $106,000 and the owner's equity is $31,000, we can rearrange the equation to solve for liabilities:
Liabilities = Assets - Owner's Equity
Liabilities = $106,000 - $31,000
Liabilities = $75,000
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Two payments of $9,000 and $4,900 are due in 1 year and 2 years, respectively. Calculate the two equal payments that would replace these payments, made in 6 months and in 4 years if money is worth 10.5% compounded quarterly.
The two equal payments would be $4,225.41 each.
To find the equal payments that would replace the given payments, we need to solve the equation:
PV1 = X / (1 + 0.02625)^(2) + X / (1.02625)^(16)
Substituting the present values we calculated earlier:
$7,801.53 = X / 1.0550625 + X / 1.1129823
To solve this equation, we can simplify it by finding a common denominator:
$7,801.53 = (X * 1.1129823 + X * 1.0550625) / 1.0550625 * 1.1129823
$7,801.53 = (X * 1.1129823 + X * 1.0550625) / 1.1725048496875
Next, we can multiply both sides of the equation by 1.1725048496875 to eliminate the denominator:
$7,801.53 * 1.1725048496875 = X * 1.1129823 + X * 1.0550625
$9,156.86 = 1.1129823X + 1.0550625X
Combining like terms:
$9,156.86 = 2.1680448X
Now, we can solve for X by dividing both sides of the equation by 2.1680448:
X = $9,156.86 / 2.1680448
X ≈ $4,225.41
Therefore, the two equal payments that would replace the given payments, made in 6 months and in 4 years, would be approximately $4,225.41 each.
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During Year 3, Zachary Corporation reported after-tax net income of $3,575,000. During the year, the number of shares of stock outstanding remained constant at 9,600 of $100 par, 9 percent preferred stock and 399,000 shares of common stock. The company's total stockholders' equity is $19,500,000 at December 31 , Year 3 . Zachary Corporation's common stock was selling at $52 per share at the end of its fiscal year. All dividends for the year have been paid, including $4.70 per share to common stockholders. Required a. Compute the earnings per share. (Round your answer to 2 decimal places.) b. Compute the book value per share of common stock. (Round your answer to 2 decimal places.) c. Compute the price-earnings ratio. (Round intermediate calculations and final answer to 2 decimal places.) d. Compute the dividend yield. (Round your percentage answer to 2 decimal places (i.e., 0.2345 should be entered as 23.45 ).
a. To compute the earnings per share (EPS), we need to divide the after-tax net income by the weighted average number of common shares outstanding.
Net income: $3,575,000
Number of common shares outstanding: 399,000
EPS = Net income / Number of common shares outstanding
EPS = $3,575,000 / 399,000
EPS = $8.96 (rounded to 2 decimal places)
b. To compute the book value per share of common stock, we divide the total stockholders' equity by the number of common shares outstanding.
Total stockholders' equity: $19,500,000
Number of common shares outstanding: 399,000
Book value per share of common stock = Total stockholders' equity / Number of common shares outstanding
Book value per share of common stock = $19,500,000 / 399,000
Book value per share of common stock = $48.87 (rounded to 2 decimal places)
c. To compute the price-earnings ratio, we divide the market price per share by the earnings per share.
Market price per share: $52
Earnings per share: $8.96
Price-earnings ratio = Market price per share / Earnings per share
Price-earnings ratio = $52 / $8.96
Price-earnings ratio = 5.80 (rounded to 2 decimal places)
d. To compute the dividend yield, we divide the dividends per share by the market price per share and multiply by 100 to express it as a percentage.
Dividends per share: $4.70
Market price per share: $52
Dividend yield = (Dividends per share / Market price per share) x 100
Dividend yield = ($4.70 / $52) x 100
Dividend yield = 9.04% (rounded to 2 decimal places)
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3 6 A 9 DE CALEL Suppose that Statistics instructor usually makes an adjustment for the final grades on 25% of her students' emails. She takes the survey for her own research which is related to the relationship between students' final grades and the students' emails she receives relating to grades. In her survey, she computes the standard error of the proportion for emails as 0.0625. Using the information above, (i) determine how large was the sample used in her analysis. (5 Points) (ii) Using the sampling distribution, compute the probability that the instructor obtains a grade adjustment on 30% or more of her students' emails, (Use a distribution graph in your solution). (5 Points) Choose "True" if you submit your solutions in the midterm exam file posted under Assessment-Assignment True False
(i) In order to determine the sample size used in the analysis, we can use the formula for standard error, which is SEp = sqrt [ p ( 1 - p ) / n ]. Here, p refers to the proportion of emails on which the instructor makes an adjustment (which is 25% or 0.25), and n refers to the sample size. By plugging in the values we have, we get: 0.0625 = sqrt [ 0.25(1 - 0.25) / n ]. Squaring both sides of the equation, we get 0.00390625 = 0.25(0.75) / n, which simplifies to n = 48.1776. Rounding this up, we get a sample size of 49.
(ii) To compute the probability that the instructor obtains a grade adjustment on 30% or more of her students' emails, we can use the sampling distribution. Here, p = 0.25 (the proportion of emails on which the instructor makes an adjustment) and n = 49 (the sample size). Using the mean and standard deviation of the sampling distribution, we get: Mean = µp = p = 0.25, Standard deviation = σp = sqrt [ p ( 1 - p ) / n ] = sqrt [ 0.25(0.75) / 49 ] = 0.0803.
By using the z-score formula, we can find the z-score for the sample proportion. Here, p = 0.3, and we get z = (x - µ) / σ = (0.3 - 0.25) / 0.0803 = 0.621. Thus, the probability that the instructor obtains a grade adjustment on 30% or more of her students' emails is the probability that a z-score is greater than 0.621. Using a standard normal distribution table or calculator, we find this probability to be approximately 0.2687.
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There are two mutual fund managers. Manager 1 earned 21% in the past year, whereas manager 2 earned 11% in the past year. The beta of the first manager is 1.8, whereas the beta for the second manager is 0.9. Assume CAPM is the correct model. Which manager is a better stock selector (e. who performed better on a risk-adjusted basis)? (hint: compare the actual return with the expected return according to CAPM) Manager 1 Not enough information provided Both performed equally Manager 2 QUESTION 14 If the inflation rate is 6%, and a project with a cost of capital of 12% (real) will return $110 in nominal cash next year, what is the PV of the $110 dollars today? $92.65 $92.05 ve and Submit to save and submit. Click Save All Answers to save all answers. Save All Al
The present value of the $110 cash return is approximately $92.4.
Given, Return earned by Manager 1 = 21%Return earned by Manager 2 = 11%Beta of Manager 1 = 1.8Beta of Manager 2 = 0.9Inflation rate = 6%Cost of capital (real) = 12%Nominal cash return next year = $110We are given that CAPM is the correct model. According to the CAPM model, the expected return can be calculated as: Expected return = Risk-free rate + beta x (Market return - Risk-free rate)Now, we will calculate the expected return for Manager 1 and Manager 2 using CAPM. Model Manager 1:Expected return of Manager 1 = 0.06 + 1.8 × (0.12 - 0.06) = 0.6 + 0.108 = 0.708 or 70.8%Model Manager 2:Expected return of Manager 2 = 0.06 + 0.9 × (0.12 - 0.06) = 0.6 + 0.054 = 0.654 or 65.4%We can see that the expected return for Manager 1 is higher than the expected return of Manager 2. Now, we will calculate the risk-adjusted return of each manager by using the formula: Risk-adjusted return = (Actual return - Expected return) / Beta. We can see that the beta is used to adjust for risk. The risk-adjusted return shows how much return an investor is getting for each unit of risk.
Risk-adjusted return of Manager 1: = (0.21 - 0.708) / 1.8 = -0.264Risk-adjusted return of Manager 2: = (0.11 - 0.654) / 0.9 = -0.604The negative risk-adjusted return indicates that both managers underperformed. However, Manager 2 had a worse risk-adjusted return. Therefore, Manager 1 is the better stock selector (i.e., performed better on a risk-adjusted basis).To calculate the present value of the $110 cash return, we can use the formula for present value. Present Value = Future Cash Flow / (1 + Cost of Capital)Here, the future cash flow is $110, the cost of capital is 12% (real), and the inflation rate is 6%. The nominal cost of capital is given by:Nominal cost of capital = Real cost of capital + Inflation rate= 0.12 + 0.06 = 0.18Now, we can calculate the present value:Present Value = 110 / (1 + 0.18)= $92.37 ≈ $92.4.
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just need answer for number 2
1) McElroy, Inc. is a U.S. corporation that is
expanding its operations into Europe. It is
considering two locations. The first location is
in a
country which imposes a corporate income tax
rate of 20%. The other is in a country that
imposes a corporate income tax rate of
15%
McElroy s analysis suggests that it can
generate a 12% pre-tax return on its
investment in country 1. Assuming a 20%
corporate income tax rate,
what would be its after-tax return on investment
in this country? (Assume Mckiroy is planning a
$50 million investment)
2) What pre-tax rate of return would McElroy
have to generate in country 2 (15% tax rate) to
match the after-tax return available in
country 1?
(just need answer for 2)
To match the after-tax return available in country 1 with a 20% corporate income tax rate, McElroy would need to generate a pre-tax rate of return of approximately 14.55% in country 2 (15% tax rate).
McElroy would need to generate a pre-tax rate of return of approximately 14.12% in country 2 (15% tax rate) to match the after-tax return available in country 1. To calculate the pre-tax rate of return required in country 2, we can use the formula:Pre-tax rate of return = After-tax return / (1 - Tax rate)In country 1, the after-tax return is 12% (pre-tax return), and the tax rate is 20%. Plugging these values into the formula, we get:Pre-tax rate of return = 12% / (1 - 0.20) = 12% / 0.80 ≈ 15%To match the after-tax return available in country 1, McElroy would need to generate a pre-tax rate of return of approximately 14.12% in country 2 (15% tax rate).
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Calculate the 5% projection in 2022 using a formula that multiplies the 2021 value by the percentage and then adds the 2021 value to the result. Be sure that the formula always references the percenta
The resulting projection for 2022 is equal to the 2021 value multiplied by 1.05.
To calculate the 5% projection in 2022 using the provided formula, you need the 2021 value to serve as a base. The formula multiplies the 2021 value by the percentage and then adds the 2021 value to the result. Here's the step-by-step calculation:
1. Obtain the 2021 value:
Let's assume the 2021 value is represented by X.
2. Calculate the 5% increase:
Multiply the 2021 value by the percentage (5% or 0.05):
5% increase = X * 0.05
3. Add the increase to the 2021 value:
Projection for 2022 = X + (X * 0.05)
Projection for 2022 = X * (1 + 0.05)
Projection for 2022 = X * 1.05
The resulting projection for 2022 is equal to the 2021 value multiplied by 1.05.
It's important to note that this calculation assumes a simple percentage increase and doesn't take into account other factors or variables that could affect the projection. Additionally, the accuracy of the projection relies on the reliability and relevance of the 2021 value used as the base.
For example, if the 2021 value is $100, the projection for 2022 using this formula would be $105 (100 * 1.05). However, this is a simplified calculation, and in practical situations, it's recommended to consider a more comprehensive analysis that incorporates various factors and assumptions for a more accurate projection.
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After the success of the company's first two months, Santana Rey continues to operate Business Solutions. The November 30, 2020, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2020) follows. Debit Credit $ 39,164 13,118 2,545 1,860 3,160 B, 300 $ 0 21,600 No. Account Title 101 Cash 106 Accounts receivable 126 Computer supplies 128 Prepaid insurance 131 Prepaid rent 163 office equipment 164 Accumulated depreciation office equipment 167 Computer equipment 168 Accumulated depreciation Computer equipment 201 Accounts payable 210 Wages payable 236 Unearned computer services revenue 307 Common stock 318 Retained earnings 319 Dividends 403 Computer services revenue 612 Depreciation expense-office equipment 613 Depreciation expense-computer equipment 623 Wages expense 637 Insurance expense 640 Rent expense 652 Computer supplies expense 655 Advertising expense 676 Mileage expense 677 Miscellaneous expenses 684 Repairs expense-Computer Totals 0 0 0 0 0 0 68,000 0 6,100 33,644 D 0 2,500 0 D 0 1,638 654 210 795 $101,644 $ 101,644 Business Solutions had the following transactions and events in December 2020. Dec. 2 Paid $1,025 cash to Hillside Mall for Business Solutions's share of mall advertising costs. 3 Paid $410 cash for minor repairs to the company's computer. 4 Received $4,450 cash from Alex's Engineering Co. for the receivable from November. 10 Paid cash to Lyn Addie for six days of work at the rate of $105 per day. 14 Notified by Alex's Engineering Co. that Business Solutions's bid of $7,700 on a proposed project has been accepted. Alex's paid a $2,400 cash advance to Business Solutions. 15 Purchased $1,300 of computer supplies on credit from Harris Office Products. 16 Sent a reminder to Gomez Co. to pay the fee for services recorded on November 8. 20 Completed a project for Liu Corporation and received $5,875 cash. 22- Took the week off for the holidays. 26 28 Received $3,400 cash from Gomez Co. on its receivable. 29 Reimbursed s. Rey for business automobile mileage (400 miles at $0.25 per mile). 31 The company paid $1,300 cash in dividends. The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the company's first three months. a. The December 31 inventory count of computer supplies shows $640 still available. b. Three months have expired since the 12-month insurance premium was paid in advance. c. As of December 31, Lyn Addie has not been paid for four days of work at $105 per day. d. The computer system, acquired on October 1, is expected to have a four-year life with no salvage value. e. The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value. f. Three of the four months prepaid rent have expired. Required: 1. Prepare journal entries to record each of the December transactions and events for Business Solutions. 2-a. Prepare adjusting entries to reflect a through f. 2-b. Post the journal entries to record each of the December transactions from Requirement 1 and adjusting entries from Requirement 2A. After completing Requirement 7. post the closing entries to the general ledger accounts. 3. Prepare an adjusted trial balance as of December 31, 2020. 4. Prepare an income statement for the three months ended December 31, 2020. 5. Prepare a statement of retained earnings for the three months ended December 31, 2020. 6. Prepare a balance sheet as of December 31, 2020. 7. Record the necessary closing entries as of December 31, 2019 and then post the closing entries to the general ledger in Requirement 2B 8. Prepare a post-closing trial balance as of December 31, 2020
Here are the journal entries to record the December transactions and events for Business Solutions, as well as the adjusting entries to reflect a through f.
The Journal EntriesDate Account Debit Credit
Dec. 2 Advertising Expense Cash $1,025
Dec. 3 Repairs Expense Cash $410
Dec. 4 Cash Accounts Receivable $4,450
Dec. 10 Cash Wages Expense $630
Dec. 14 Cash Unearned Computer Services Revenue $2,400
Dec. 15 Computer Supplies Expense Accounts Payable $1,300
Dec. 20 Cash Computer Services Revenue $5,875
Dec. 29 Mileage Expense Cash $100
Dec. 31 Dividends Cash $1,300
Adjusting Entries
Date Account Debit Credit
Dec. 31 Inventory of Computer Supplies $640
Dec. 31 Insurance Expense Prepaid Insurance $270
Dec. 31 Wages Expense Wages Payable $420
Dec. 31 Depreciation Expense-Computer Equipment Accumulated Depreciation-Computer Equipment $250
Dec. 31 Depreciation Expense-Office Equipment Accumulated Depreciation-Office Equipment $320
Dec. 31 Rent Expense Prepaid Rent $900
The adjusted trial balance, income statement, statement of retained earnings, and balance sheet can be prepared by following the standard accounting procedures.
The closing entries can be prepared by transferring the balances of the temporary accounts to the retained earnings account. The post-closing trial balance can be prepared by listing all of the accounts in the ledger and their balances after the closing entries have been posted.
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When governmental entities provide defined benefit pension plans to governmental employees, a pension trust fund is used by the governmental entity that is acting as a trustee on behalf of current and future retirees to manage the funds at the "plan" level. The pension trust fund reports liabilities on its Statement of Fiduciary Net Position that primarily are related to pension benefits currently due to retired employees. The statement does not report a long-term liability for an unfunded portion, if any, of pension obligations. Do you think this is misleading? What, if anything, should be done differently at the "plan" level to provide readers with greater transparency regarding long-term funding of pension obligations?
Yes, not reporting a long-term liability for an unfunded portion, if any, of pension obligations is misleading. It is important to note that the Governmental Accounting Standards Board (GASB) requires the governmental entity to provide readers with greater transparency regarding long-term funding of pension obligations.
When governmental entities provide defined benefit pension plans to governmental employees, a pension trust fund is used by the governmental entity that is acting as a trustee on behalf of current and future retirees to manage the funds at the "plan" level. The pension trust fund reports liabilities on its Statement of Fiduciary Net Position that primarily are related to pension benefits currently due to retired employees. The statement does not report a long-term liability for an unfunded portion, if any, of pension obligations.
This practice is misleading because it makes it seem like the governmental entity has fully funded the plan, and that there are no long-term liabilities that need to be paid in the future. However, if the pension trust fund is not fully funded, then there will be long-term liabilities that need to be paid in the future. It is important to note that if the plan is not fully funded, the long-term liability that is not reported can be quite significant, which means that readers may not be getting a complete picture of the financial health of the pension plan.
It is therefore recommended that GASB requires the governmental entity to provide readers with greater transparency regarding long-term funding of pension obligations. This can be done by requiring the plan to report the unfunded liability on its financial statements so that readers can see the true financial health of the plan. The plan should also be required to provide additional information about its funding policy and the steps that it is taking to ensure that it can meet its long-term obligations.
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ICON Health and Fitness inc. is considering the purchase of a new software for their NordicTrack treadmill product line which improves the user experience. This software comes with a contract option to use at any point during its ownership to aid with technical systems updates and effective data storage management. The company decides that it will go without this contract for the first 4 years of ownership, planning to begin utilizing it on year 5 and continue through year 8 - where at this time they plan to make another system upgrade. The cost of this contract is $5,500 per year, assumed rate of return is 9% per year. (a) Draw the cash flow diagram described above. (b) What will be the present worth of the contract? (c) What will be the future worth of the contract? (d) If they wish to pre-pay the contract with uniform payments in years one - four only, what will be the amount of each payment. (e) What will be the equivalent uniform annual amount of the contract in years one through eight?
a) The cash flow diagram for the purchase of the software and the contract is as follows.
b) The present worth of the contract can be calculated as the sum of the present worth of each annual payment.
c) The future worth of the contract at the end of year 4 can be calculated as the sum of the future worth of each annual payment from year 5 through year 8.
d) the amount of each payment in years one through four would be $5,019.73.
e) the equivalent uniform annual amount of the contract in years one through eight is $21,033.89.
Year 0 1 2 3 4 5 6 7 8
Cash Flow -C -C -C -C -S-C -S-C -S-C -S-C+Cf -S-C
|------|------|------|------|------|------|------|------|
where:
C represents the cost of the software without the contract
S represents the cost of the software with the contract ($5,500 per year)
Cf represents the cash flow received at the end of year 8 due to replacing the software
b) The present worth of the contract can be calculated as the sum of the present worth of each annual payment. Since the payments start at year 5 and continue through year 8, we need to calculate the present worth of a four-year annuity due with an annual payment of $5,500 and a discount rate of 9%. Using the formula for the present worth of an annuity due, we get:
PV = A * [(1 - (1 + i)^(-n)) / i] * (1 + i)
PV = $5,500 * [(1 - (1 + 0.09)^(-4)) / 0.09] * (1 + 0.09)
PV = $17,386.29
Therefore, the present worth of the contract is $17,386.29.
c) The future worth of the contract at the end of year 4 can be calculated as the sum of the future worth of each annual payment from year 5 through year 8. Using the formula for the future worth of an annuity, we get:
FV = A * [(1 + i)^n - 1] / i
FV = $5,500 * [(1 + 0.09)^4 - 1] / 0.09
FV = $25,257.05
Therefore, the future worth of the contract at the end of year 4 is $25,257.05.
d) To calculate the amount of each payment if the contract is prepaid with uniform payments in years one through four, we need to calculate the present worth of a four-year annuity due with an annual payment of X that equals the present worth of the contract calculated in part (b). Using the formula for the present worth of an annuity due, we get:
X * [(1 - (1 + 0.09)^(-4)) / 0.09] * (1 + 0.09) = $17,386.29
X = $5,019.73
Therefore, the amount of each payment in years one through four would be $5,019.73.
e) The equivalent uniform annual amount of the contract in years one through eight can be calculated as the sum of the annual cost of the software without the contract and the amount of each payment calculated in part (d), both discounted to their present worth at year zero. Using the formula for the present worth of a single amount, we get:
PV(C) = C / (1 + i)^n
PV(S-C) = (S - C) / (1 + i)^n
PV(S-C+Cf) = (S - C + Cf) / (1 + i)^n
PV(payment) = X / (1 + i)^n
where n = number of years from the cash flow to year zero, and i = discount rate.
The equivalent uniform annual amount is then:
EUA = [PV(C) + PV(payment)] + [PV(S-C) + PV(payment)] * 4 + PV(S-C+Cf)
EUA = [$0 + $5,019.73] + [($5,500 - C) / (1 + 0.09)^1 + $5,019.73] * 4 + ($5,500 - C + Cf) / (1 + 0.09)^4
EUA = $21,033.89
Therefore, the equivalent uniform annual amount of the contract in years one through eight is $21,033.89.
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Consider the following distribution and random numbers:
Demand: 0 1 2 3 4
Frequency: .15 .30 .25 .15 .15
Random numbers: 62 13 25 40 If a simulation begins with the first random number, what would the first simulation value be
Given a distribution and random numbers; Demand: 0 1 2 3 4Frequency: .15 .30 .25 .15 .15Random numbers: 62 13 25 40, if a simulation begins with the first random number, what would be the first simulation value?
we use the following
steps:Step 1: Add up the frequencies to obtain the cumulative frequency.
Step 2: Divide each frequency by the cumulative frequency.
Step 3: Build a table with the cumulative probability.
Step 4: Assign the random number to the simulation value. To find the first simulation value, we have to use the given steps as follows
Step 1: Add up the frequencies to obtain the cumulative frequency. The cumulative frequency is 1; we can obtain this by adding up all the frequencies.
Step 2: Divide each frequency by the cumulative frequency. We now obtain the following table. DemandFrequencyCFrequency/CFProbability0.150.150.1510.300.450.4510.250.700.7010.150.850.8510.150.991.00Step 3: Build a table with the cumulative probability. To build a table with the cumulative probability, we have to add up the probabilities; this gives us a cumulative probability table. DemandProbabilityCumulative probability0.150.1510.300.4510.250.7010.150.8510.150.99Step
4: Assign the random number to the simulation value. To assign the first simulation value, we use the first random number, which is 62; we assign it to the value that corresponds to the range in which it falls. Since 62 falls within the range of 0.45 and 0.7, the simulation value is 2.
In conclusion, to find the first simulation value, we used the given steps: we added up the frequencies to obtain the cumulative frequency; we then divided each frequency by the cumulative frequency, built a table with the cumulative probability and assigned the random number to the simulation value. Using the first random number, which is 62, we assigned it to the value that corresponds to the range in which it falls. Since 62 falls within the range of 0.45 and 0.7, the simulation value is 2. Therefore, the first simulation value is 2.
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Answer the following questions:
Many new managers may see communication as being a very simple process of talking with teammates or sending emails. However, communication is a more complex, multistep process that involves both clearly defining and stating ideas as well as understanding the audience and their potential reaction to the message. As shown in What is communication process? Steps of communication process (Links to an external site.) (The Business Communication, n.d.)
From your experience in working in business or in working with other groups, briefly describe a time when a communication from leadership failed.
What stage of the communication process was not completed?
What was the organizational result?
Describe how you would have performed the communication to avoid this result.
Please be sure to validate your opinions and ideas with citations and references in APA format.
In my experience, there was a time when a communication from leadership failed. The stage of the communication process that was not completed was "understanding the audience and their potential reaction to the message."
The organizational result was confusion and a lack of alignment among team members. To avoid this result, I would have performed the communication by first analyzing the audience and their needs, then tailoring the message to ensure clarity and relevance. I would also have used multiple channels of communication, such as face-to-face meetings and follow-up emails, to reinforce the message and address any potential misunderstandings.
Effective communication is a key to interpersonal skills to improve our relations with other people . The most important things to remember in creating an effective communication is by keep yourself aware of what your receiver want.
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Compare and contrast the applications of Six Sigma vs. TQM on a company that you are
familiar with. Reflect on the applicability, benefits, and limitations of each. Support your
response with examples and strong evidence.
Total Quality Management (TQM) and Six Sigma are two methodologies that have been developed to assist organizations in achieving improved efficiency. While the methodologies differ in some aspects, they both share a commitment to continuous improvement in business processes.
Aapplications of Six Sigma vs. TQM on a company :
The application of Total Quality Management (TQM) in this company ensures that quality is built into all processes and is the responsibility of all employees, with the aim of meeting the customer's needs and expectations.
On the other hand, the application of Six Sigma methodology in this company aims to reduce variability and improve the quality of outputs by removing defects and minimizing waste.
Six Sigma methodology relies on data and statistical tools to analyze and improve business processes.TQM has several benefits for organizations.
Firstly, it leads to improved customer satisfaction, which is critical to the survival of any business. In this case, the manufacturing firm produces electronic devices that meet the needs and expectations of their customers.Secondly, TQM leads to increased productivity and reduced waste. By ensuring that quality is built into all processes, the company can reduce the number of defects, minimize rework, and optimize the use of resources.Finally, TQM leads to a culture of continuous improvement. By involving all employees in quality improvement activities, the company can continuously improve its processes and maintain a competitive edge in the market.Know more about the Total Quality Management
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You have the following data on three stocks: Standard Deviation Stock AB C B; A. OC: B. OA; B. OCA 20% OA:A. 10% 12% Beta If you are a strict risk minimize, you would choose stock. be held in isolation and Stock well-diversified portfolio. S 0.59 0.69 1.29 if it is to if it is to be held as part of a
To determine which stock to choose based on a strict risk-minimization strategy, we need to compare their standard deviations (σ) and betas.
The stock with the lowest standard deviation would be preferred for an isolated investment, while the stock with the lowest beta would be preferred for a well-diversified portfolio.
Given the data:
Stock A: Standard Deviation (σ) = 20%, Beta (β) = 0.59
Stock B: Standard Deviation (σ) = 10%, Beta (β) = 0.69
Stock C: Standard Deviation (σ) = 12%, Beta (β) = 1.29
a) For an isolated investment (held in isolation):
The stock with the lowest standard deviation is Stock B with a σ of 10%. Therefore, if you are strictly focused on minimizing risk for an isolated investment, you would choose Stock B.
b) For a well-diversified portfolio (held as part of a well-diversified portfolio):
The stock with the lowest beta is Stock A with a β of 0.59. Therefore, if you are strictly focused on minimizing risk in a well-diversified portfolio, you would choose Stock A.
a) If the investment is to be held in isolation, Stock B would be preferred due to its lower standard deviation.
b) If the investment is to be held as part of a well-diversified portfolio, Stock A would be preferred due to its lower beta.
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Using the web identify a case of successful (or at least somewhat successful) organizational culture change. Describe characteristics of the culture before and after the change effort. Most organizational scholars and management consultants admit actually changing a culture is very difficult. But there are some success stories and if you search you will find one that has been successful. Explain why you think they achieved some success based upon the reading and videos
One case of successful organizational culture change is the transformation of Microsoft under the leadership of CEO Satya Nadella.
Prior to Nadella's tenure, Microsoft had a culture characterized by internal competition, a focus on individual success, and a resistance to collaboration. However, after Nadella took over, he implemented a shift in the company's culture, emphasizing teamwork, empathy, and a growth mindset. This change resulted in increased collaboration, innovation, and a more inclusive work environment at Microsoft.
The success of Microsoft's culture change can be attributed to several factors. Firstly, Satya Nadella played a crucial role in setting a clear vision and leading by example. He communicated the importance of empathy, collaboration, and customer-centricity, which inspired employees to embrace the new culture. Additionally, Microsoft invested in employee development programs, encouraging continuous learning and growth. The introduction of platforms like Yammer and Teams fostered greater collaboration and knowledge sharing across the organization. The company also embraced diversity and inclusion initiatives, promoting a more inclusive and supportive work environment. These efforts contributed to a cultural shift that propelled Microsoft's success in recent years.
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There is one law case study to read. There are five (5) multiple choice questions to answer for the case study. Each question is worth one (1) mark each. There is only one correct answer for each question. Please choose only one answer from each of the available options. Please answer all questions.
Case Study: Road Inc. was a road construction firm which obtained a contract from the Ontario Ministry of Transportation. The Ministry provided the firm with contract documents (drawings and specifications) prepared by ABC Inc., a firm of engineering consultants. The contract documents stated that the specifications and drawings were for general information purposes and were not guaranteed for accuracy in any way. Road Inc. lost considerable money on the project due to errors in the contract documents and then sued both ABC Inc. and the individual engineers who sealed the documents, for an undisclosed amount of damages.
What is one thing that must be true for Road Inc’s case for damages to succeed?
A. There must be intent to deceive and profit on the part of the defendant.
B. There must be a strong, established relationship between the plaintiff and the defendant.
C. There must be a reliance on the information in the contract documents that was foreseeable.
Road Inc. was a road construction firm who got a contract from the Ontario Ministry of Transportation with ABC Inc., a firm of engineering consultants preparing the specifications and drawings. Road Inc. lost considerable money due to errors in the contract documents and sued ABC Inc. and the individual engineers who sealed the documents for damages.
The correct option for the given question is C. There must be a reliance on the information in the contract documents that was foreseeable. In the case of Road Inc., to succeed with a case for damages, one thing that must be true is that there must be a reliance on the information in the contract documents that was foreseeable. Road Inc. got a contract from the Ontario Ministry of Transportation with ABC Inc., a firm of engineering consultants preparing the specifications and drawings. The contract documents stated that the specifications and drawings were for general information purposes and were not guaranteed for accuracy in any way.
Road Inc. lost considerable money on the project due to errors in the contract documents and then sued both ABC Inc. and the individual engineers who sealed the documents, for an undisclosed amount of damages. The principle of foreseeability comes into play here as a reasonable person in the position of Road Inc. would foresee that the company would rely on the information provided by the engineering consultants. Thus, the option C is correct.
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NOTE: Please do not copy and paste from already answered answer
Contrast the approaches followed by Hero MotoCorp Limited (HMCL) and Aditya Birla Fashion and Retail Limited (ABFRL) to conduct a materiality assessment. What are the common material topics identified by both companies and what are unique to each?
Both HMCL and ABFRL conduct materiality assessments to identify and prioritize topics that are important to their stakeholders and business operations. While they share common material topics such as environmental sustainability and supply chain management, they also have unique material topics specific to their respective industries.
Hero MotoCorp Limited (HMCL) and Aditya Birla Fashion and Retail Limited (ABFRL) are two companies that have followed different approaches to conducting materiality assessments.
1. Approach to Conduct Materiality Assessment:
HMCL: Hero MotoCorp Limited follows a systematic approach to conducting its materiality assessment. They engage with stakeholders through surveys, interviews, and feedback sessions to understand their concerns and expectations. They also review industry-specific guidelines, global reporting frameworks, and regulatory requirements. HMCL then identifies and prioritizes material topics based on their impact on the business and stakeholder interests.
ABFRL: Aditya Birla Fashion and Retail Limited conduct its materiality assessment through a combination of internal and external stakeholder engagement. They identify and engage with stakeholders who have a significant impact or interest in their business. ABFRL also considers industry trends, global best practices, and sustainability frameworks to identify material topics. They conduct regular stakeholder dialogues, surveys, and benchmarking exercises to gather inputs for their materiality assessment.
2. Common Material Topics:
Both HMCL and ABFRL have identified certain material topics that are common to their businesses. These include:
- Environmental sustainability: Both companies recognize the importance of managing their environmental impacts, such as energy consumption, emissions, waste management, and water conservation.
- Supply chain management: Both companies prioritize responsible sourcing practices, supplier engagement, and ensuring ethical and sustainable practices throughout their supply chains.
- Employee welfare and diversity: Both HMCL and ABFRL focus on creating a safe and inclusive work environment, promoting employee well-being, and fostering diversity and equal opportunities within their organizations.
3. Unique Material Topics:
HMCL: As a motorcycle manufacturer, HMCL has specific material topics related to its industry. These may include product safety, innovation in technology and design, research and development, and promoting safe and responsible riding practices.
ABFRL: Being a fashion and retail company, ABFRL has unique material topics specific to its industry. These may include responsible fashion practices, sustainable sourcing of raw materials, ethical labor practices, product quality and safety, and customer satisfaction.
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Which of the following is a process by which investment bankers purchase new securities directly from the issuing company and resell them to the investors? O Agency marketing O Underwriting Private placement Capital management
The process by which investment bankers purchase new securities directly from the issuing company and resell them to investors is called underwriting.
It involves the investment bankers assuming the risk of buying the securities from the issuer and then selling them to the public or institutional investors. Underwriting plays a crucial role in the primary market, facilitating the issuance of new securities. Underwriting is a process commonly used by investment bankers to facilitate the issuance of new securities. When a company wants to raise capital by issuing new stocks or bonds, it may engage investment bankers to assist in the process. Investment bankers act as intermediaries between the issuing company and the investors.
During the underwriting process, the investment bankers purchase the new securities directly from the issuing company at a predetermined price. They then assume the risk of selling these securities to investors at a higher price, making a profit from the price difference, known as the underwriting spread or underwriter's discount. The investment bankers take on the responsibility of finding buyers for the securities and ensuring the successful sale of the offering.
Underwriting serves as a crucial function in the primary market as it helps companies access capital by issuing new securities. It provides a mechanism for the efficient distribution of securities to investors, ensuring a smooth and orderly process. Investment bankers play a significant role in underwriting, using their expertise, network, and market knowledge to assess the risk and pricing of the securities and to market them to potential investors.
In summary, underwriting is the process by which investment bankers purchase new securities from the issuing company and then resell them to investors. It involves assuming the risk of selling the securities and plays a vital role in the primary market by facilitating the issuance of new securities and helping companies raise capital.
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Problem 1. Simultaneous move game Use the following game to answer the questions below: Player 2 C L R T (100, 125) (300, 250) (200, 100) Player 1 M (250,0) (500, 500) (750, 400) B (0, -100) (400, 300
The given game is a simultaneous move game with Player 1 choosing between strategies M and B, and Player 2 choosing between strategies C, L, and R.
To answer the questions, we will consider the given game and analyze the outcomes for each combination of strategies chosen by the players.
Player 1 strategy M:
If Player 2 chooses strategy C: (250, 100)
If Player 2 chooses strategy L: (500, 250)
If Player 2 chooses strategy R: (750, 400)
Player 1 strategy B:
If Player 2 chooses strategy C: (0, 125)
If Player 2 chooses strategy L: (400, 250)
If Player 2 chooses strategy R: (300, 100)
The outcomes of the game depend on the strategies chosen by both players. The payoffs for each player are listed in the format (Payoff Player 1, Payoff Player 2) for each combination of strategies.
It's important to note that without any additional information, such as the players' preferences or their rational decision-making processes, we cannot determine the optimal strategies or predict the likely outcomes of the game. Further analysis and considerations, such as dominant strategies or Nash equilibria, would be required to provide a more comprehensive analysis of the game.
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The demand for good x is very inelastic (0.06). To increase total revenue in the short run, the company should probably:
A. increase price
B. decrease price
C. impossible to tell
As per the Demand theory, to increase the total revenue in the short run, the company should probably: increase price. option A is correct.
Given that the demand for good X is very inelastic(0.06),the company should probably increase the price to increase total revenue in the short run. When demand is inelastic,it means that changes in price have a relatively small impact on the quantity demanded. In this case a 1% increase in price would result in a 0.06% decrease in quantity demanded.by increasing the price,the company can benefit from the inelastic demand because the decrease in quantity demanded would be relatively small as compared to the increase in price. As a result,the total revenue(price multiplied by quantity demanded) would increase.
Therefore, the company should increase the price to increase total revenue.
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Bramble Corporation is a multi-product firm. The following information concerns one of its products, the Trinton:
Date Transaction Quantity Price/Cost
Jan. 1 Beginning inventory 1,500 $12
Feb. 4 Purchase 2,330 16
Feb 20 Sale 2,670 32
Apr. 2 Purchase 3,210 25
Nov. 4 Sale 2,600 37
(a)
Your answer is incorrect.
Calculate cost of goods sold, assuming Bramble uses a periodic inventory system and FIFO cost formula.
Cost of goods sold $________
To calculate the cost of goods sold (COGS) using the FIFO (First-In, First-Out) method, we need to determine the order in which the inventory units are sold.
Given the transactions and quantities:
Jan. 1: Beginning inventory = 1,500 units at $12 per unit
Feb. 4: Purchase = 2,330 units at $16 per unit
Feb. 20: Sale = 2,670 units at $32 per unit
Apr. 2: Purchase = 3,210 units at $25 per unit
Nov. 4: Sale = 2,600 units at $37 per unit
Using FIFO, the units sold will be from the oldest inventory first. Let's calculate the cost of goods sold:
1. Calculate the cost of goods sold for the first sale:
COGS for the first sale = 2,670 units * $12 per unit (cost of the oldest inventory)
COGS for the first sale = $32,040
2. Calculate the cost of goods sold for the second sale:
Since the remaining 2,600 units will be sold, we need to calculate the remaining inventory after the first sale:
Remaining inventory = Beginning inventory + Purchase on Feb. 4 - Units sold on Feb. 20
Remaining inventory = 1,500 + 2,330 - 2,670
Remaining inventory = 3,160 units
COGS for the second sale = 2,600 units * $16 per unit (cost of the remaining inventory)
COGS for the second sale = $41,600
3. Calculate the total cost of goods sold:
Total COGS = COGS for the first sale + COGS for the second sale
Total COGS = $32,040 + $41,600
Total COGS = $73,640
Therefore, the cost of goods sold (COGS) is $73,640.
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The cost of goods sold (COGS) for Bramble Corporation is $135,530.
To calculate the cost of goods sold (COGS) using the FIFO (First-In, First-Out) cost formula under a periodic inventory system, we need to determine the cost of each inventory transaction in chronological order.
Jan. 1: Beginning inventory - 1,500 units at $12/unit = $18,000
Feb. 4: Purchase - 2,330 units at $16/unit = $37,280
Feb. 20: Sale - 2,330 units (assuming the first purchase is fully depleted) at $16/unit = $37,280
Apr. 2: Purchase - 3,210 units at $25/unit = $80,250
Nov. 4: Sale - 3,210 units (assuming the second purchase is fully depleted) at $25/unit = $80,250
To calculate the COGS, we sum up the costs of the inventory that was sold:
COGS = Cost of beginning inventory + Cost of first purchase + Cost of second purchase
COGS = $18,000 + $37,280 + $80,250
COGS = $135,530
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QUESTION 3 A man age 30 purchased a $10,000 (ten thousands) whole life insurance policy with immediate payment of benefits clause added. Premiums are paid monthly for 25 years. In addition, if death occurred between the ages of 35 to 50, an annual sum of $15,000 (fifteen thousands) for 10 years will be paid to his beneficiaries. These 10 years guaranteed payments will be made starting a year after payment of $10,000 (ten thousand), the whole life policy value, if and only if such death occurred between the ages of 35 to 50. a) Construct the commutation form for P the premiums for the policy. b) How much is his monthly premium for the above policy? (20 marks)
To construct the commutation form for the premiums (P) for the whole life insurance policy, we need to calculate the present value of the premiums paid over 25 years.
The premiums are paid monthly for 25 years, so we need to calculate the present value of 300 (25 years * 12 months) monthly premiums.
Let's assume the interest rate is r. The present value of a series of equal payments can be calculated using the formula:
PV = P * [1 - (1 + r)^(-n)] / r,
where PV is the present value, P is the monthly payment, r is the interest rate, and n is the total number of payments.
In this case, the monthly premium is P, and n is 300. We need to solve for the present value PV.
To calculate the monthly premium for the above policy, we need to determine the present value (PV) of the premiums.
Given that the face value of the policy is $10,000, and it is paid immediately, the present value of this benefit is $10,000.
The guaranteed payments of $15,000 per year for 10 years will be paid if death occurs between the ages of 35 to 50. These payments will start a year after the $10,000 policy value is paid.
Let's assume the interest rate is r. The present value of a future series of equal payments can be calculated using the formula:
PV = P * (1 - (1 + r)^(-n)) / r * (1 + r)^(-m),
where PV is the present value, P is the annual payment, r is the interest rate, n is the total number of payments, and m is the number of years until the payments start.
In this case, the annual payment is $15,000, the number of payments is 10, and the number of years until the payments start is 1.
We need to solve for the present value PV.
To calculate the monthly premium, we add the present value of the immediate payment ($10,000) and the present value of the guaranteed payments ($15,000 for 10 years starting a year later).
The monthly premium is then calculated by dividing the total present value by the number of months in 25 years (300).
The commutation form for the premium (P) is obtained by calculating the present value of the monthly premiums paid over 25 years using the formula PV = P * [1 - (1 + r)^(-n)] / r.
The monthly premium for the above policy is calculated by dividing the total present value of the immediate payment and the guaranteed payments by the number of months in 25 years (300).
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The spot price of copper is $7,060 per tone. The forward price for 1 year maturity is $7,511. The risk-free interest rate is r = 5.0%.
i) Is there an arbitrage opportunity? If yes, describe the steps required to realize the arbitrage. Neglect the storage cost.
ii) Consider now the case when the forward price is $7,415. Is there an arbitrage opportunity?
Arbitrage opportunity refers to a situation in financial markets where an investor can take advantage of price discrepancies or market inefficiencies to make risk-free profits. It occurs when an asset is priced differently in different markets or when the price of related assets is not properly aligned.
i) Yes, there is an arbitrage opportunity when the forward price is $7,511. Arbitrage refers to the practice of taking advantage of price differences in different markets to make risk-free profits. In this case, we can exploit the price difference between the spot price and the forward price.
To realize the arbitrage, we can follow these steps:
1) Borrow money: Borrow an amount equal to the spot price, $7,060, at the risk-free interest rate of 5.0%. This would result in a borrowing cost of $7,060 * 0.05 = $353.
2) Buy copper: Use the borrowed money to buy 1 ton of copper at the spot price of $7,060.
3) Sell forward: Sell the copper forward at the forward price of $7,511. This would generate a cash inflow of $7,511.
4) Invest the cash: Invest the cash inflow at the risk-free interest rate of 5.0% for 1 year. After 1 year, the investment will grow to $7,511 * (1 + 0.05) = $7,886.
5) Repay the loan: At the end of the year, repay the loan with the accumulated investment, which is $7,886. This leaves us with a profit of $7,886 - $7,060 - $353 = $473.
Therefore, by following these steps, we can make a risk-free profit of $473 by exploiting the price difference between the spot price and the forward price.
ii) No, there is no arbitrage opportunity when the forward price is $7,415. If the forward price is lower than the expected future spot price, there would be a risk-free arbitrage opportunity. However, in this case, the forward price of $7,415 is lower than the spot price of $7,060. This means that the forward price already reflects the expected future spot price, considering the risk-free interest rate. Therefore, there is no opportunity for risk-free arbitrage.
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(Liquidity Analysis) The King Carpet Company has
$2,800,000
in cash and a total of
$12,670,000
in current assets. The firm's current liabilities equal
$5,090,000
such that the firm's current ratio equals
2.5.
The company's managers want to reduce the firm's cash holdings down to
$1,150,000
by paying
$539,000
in cash to expand the firm's truck fleet and using
$1,111,000
in cash to retire a short-term note. If they carry this plan through, what will happen to the firm's current ratio?
Question content area bottom
Part 1
The new current ratio is
enter your response here.
(Round to one decimal place.)
The new current ratio would be 1.8. This is calculated by subtracting the reduction in cash ($1,650,000) from the current assets ($12,670,000) and dividing the result by the current liabilities ($5,090,000).
By reducing cash holdings and using cash to expand the truck fleet and retire a short-term note, the company's current assets will decrease by $1,650,000. The current liabilities remain unchanged. The new current ratio is calculated by dividing the reduced current assets ($12,670,000 - $1,650,000) by the current liabilities ($5,090,000), resulting in a current ratio of 1.8. This indicates a decrease in the firm's ability to cover its short-term obligations with its current assets.
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Sariah's Home Entertainment LLC ("SHE LLC") is a company that sells in-home entertainment systems. In 2021, SHE had provided you, its CPA, with the following information about its 2021 activities: ▪ Gross profit from sales of home entertainment systems $475,000 (no book-tax differences). ▪ Dividends SHE received from a 21 percent-owned corporation of $137,000. SHE uses the equity method of accounting this minority-owned subsidiary and this also represents its pro rata share of the corporation's earnings. ▪ Expenses other than the dividend received deduction (DRD), charitable contribution (CC) and net operating loss (NOL), are $339,000. ▪ SHE's tax depreciation exceeded book depreciation by $18,500 ▪ NOL carryover from prior year of $17,000. ▪ SHE's book federal income tax expense is $57,000. 1. What is SHE's book net income? 2. What is SHE's modified DRD taxable income? 3. What is SHE'S DRD? 4. What is SHE's taxable income after the NOL carryover and the DRD? 5. What is SHE's taxable income on Schedule M-1?
1. SHE's book net income is $136,000. 2. SHE's modified DRD taxable income is $117,500. 3 SHE's DRD is $82,250. 4 SHE's taxable income after the NOL carryover and DRD is $18,250. 5 SHE's taxable income on Schedule M-1 is $52,250
SHE's taxable income on Schedule M-1 is $261,200.Explanation:1. Calculation of SHE's book net income: SHE's Gross profit = $475,000 Expenses = $339,000 Book tax expense = $57,000
Therefore, SHE's book net income = Gross profit - Expenses - Book tax expense= $475,000 - $339,000 - $57,000= $79,0002. Calculation of SHE's modified DRD taxable income: Modified DRD taxable income = Book net income + Excess tax depreciation - DRD- Charitable contribution (CC)- NOL carryover from the prior year = $152,500 + $18,500 - $27,300 - $0 - $17,000= $126,7003.
SHE's DRD:DRD = 50% × Dividends received= 50% × $137,000= $68,5004. Calculation of SHE's taxable income after the NOL carryover and the DRD: SHE's taxable income after the NOL carryover and the DRD = Modified DRD taxable income - DRD - NOL carryover= $126,700 - $68,500 - $17,000= $41,2005.
Calculation of SHE's taxable income on Schedule M-1:SHE's taxable income on Schedule M-1 = Taxable income per books + Excess tax depreciation - DRD - Charitable contributions= $152,500 + $18,500 - $27,300 - $0= $143,700 Therefore, SHE's taxable income on Schedule M-1 is $261,200 ($143,700 plus the dividends received of $137,000).
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how is the hierarchy of norms in Belgium and mention the international treaties ? please write it in a short format.
Belgium follows a hierarchical system of norms in which the Constitution is the supreme law, followed by international treaties that have been ratified by the country and then the laws made by parliament and the regional assemblies. The Constitution's provisions take precedence over all other legal provisions.
International treaties that have been ratified by Belgium are placed second in the hierarchy of norms, and they supersede national laws. Finally, parliamentary laws are situated at the bottom of the hierarchy, and they must be compatible with the Constitution and international law.
The following international treaties are ratified by Belgium: the European Convention on Human Rights, the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social, and Cultural Rights, and the United Nations Convention on the Rights of the Child.
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Transcribed image text: deck 73 of 176 Aa 4 di Payatas Power. On July 1, 2000, a mountain of garbage at the Payatas landfill on the outskirts of Quezon City in the Philippines fell on the surrounding slum community killing nearly 300 people and destroying the homes of hundreds of families who foraged the dump site. In 2007, Pangea Green Energy Philippines Inc. (PGEP), a subsidiary of Italian utility company Pangea Green Energy, announced an ambitious plan to drill 33 gas wells on the landfill to harvest methane gas from the bottom of the waste pile. An initial U.S. $4 million investment built a 200-kilowatt power plant to be fueled by the harvested methane. The power generated makes the landfill self-sufficient and allows excess power to be sold to the city power grid However, the real payoff will come from carbon-offset credits. Methane gas is 21 times more polluting than carbon dioxide as a greenhouse gas. Capturing and burning methane releases carbon dioxide and therefore has 21 times less emission impact-a reduction that can be captured as an offset credit. PGEP will arrange trading of those carbon credits in return for a donation of an estimated U.S. $300,000 to the Quezon City community-funds that will be used to develop the local infrastructure and build schools and medical centers for the Payatas community. The landfill has now been renamed Quezon City Controlled Disposal Facility. 1. The PGEP.Payatas project is being promoted as a win-win project for all parties involved. Is that an accurate assessment? Why or why not? 2. The Payatas project is estimated to generate 100,000 carbon credits per year. At an average market value of $30 per credit (prices vary according to the source of the credit), PGEP will receive an estimated $3 million from the project. On those terms, is the $300,000 donation to the Payatas.community a fair one? 3. How could Quezon City officials ensure that there is a more equitable distribution of wealth? Charm-el Prop10.doc They a
The assessment that the PGEP.Payatas project is a win-win for all parties involved is generally accurate.
The project addresses several key issues and benefits different stakeholders. It provides environmental benefits by capturing and utilizing methane gas, reducing its harmful impact on the atmosphere.
The project also makes the landfill self-sufficient in terms of power generation and enables the sale of excess power to the city grid, contributing to the local energy supply. Furthermore, the project generates carbon-offset credits, which can be traded for financial gains.
Additionally, the donation of funds to the Quezon City community aims to support infrastructure development and improve the living conditions of the Payatas community. Overall, the project aligns economic and environmental interests while addressing social needs.
The $300,000 donation to the Payatas community, considering the estimated revenue of $3 million from carbon credits, raises questions of fairness.
The ratio of the donation to the estimated revenue is 10%, which might be perceived as relatively low. However, it is essential to consider the specific agreements and negotiations between PGEP and the community.
The fair assessment of the donation would require understanding the project's costs, the financial sustainability of PGEP, the potential long-term benefits for the community, and whether alternative arrangements or investments are made for community development.
Without this information, it is challenging to definitively determine the fairness of the donation.
To ensure a more equitable distribution of wealth, Quezon City officials can implement various measures:
Establish clear agreements and contracts between PGEP and the community to ensure transparency and fair distribution of benefits.
Work with community representatives to identify and prioritize the needs of the Payatas community, ensuring that the funds and resources generated by the project are utilized for their intended purpose.
Develop mechanisms to track and monitor the impact of the project on the community's development, ensuring that the benefits are reaching those most in need.
Implement programs or initiatives that promote local entrepreneurship and job creation within the community to provide sustainable economic opportunities.
Foster community engagement and participation in decision-making processes related to the project and its benefits to ensure that the community's voice is heard and considered.
By implementing these measures, Quezon City officials can strive for a more equitable distribution of wealth and ensure that the benefits generated by the project reach the Payatas community in a meaningful and sustainable way.
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