Producing at an output level where the price (P) is greater than the marginal cost (MC) is considered inefficient because it indicates that resources are not being allocated optimally and society is not maximizing its overall welfare.
In a perfectly competitive market with no externalities, firms aim to maximize their profits by producing at the output level where marginal cost (MC) equals the market price (P). This is because at this point, the firm is allocating its resources efficiently and minimizing its production costs. However, if the price (P) is greater than the marginal cost (MC), it suggests that the firm is charging a price higher than the additional cost of producing an extra unit. This situation indicates that the firm has the ability to increase its output and still make a profit, but it is choosing not to do so.
From a societal perspective, producing at an output level where P > MC is inefficient because it means that resources are not being utilized optimally. There is an opportunity to increase production and provide more goods or services to consumers without incurring significant additional costs. By not taking advantage of this opportunity, society is missing out on potential gains in consumer welfare and overall economic efficiency.
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A bailment is formed by the delivery of personal property, without transfer of title, by one person to another.True False
A bailment is a legal relationship that arises when one person, known as the bailor, delivers personal property to another person, known as the bailee, without transferring ownership or title of the property. In a bailment, the bailor retains ownership while entrusting the possession or control of the property to the bailee for a specific purpose or period of time.
The key characteristic of a bailment is that it involves the temporary transfer of possession, custody, or control of the property, without the transfer of ownership. The bailor retains the right to reclaim the property at the end of the bailment or upon fulfillment of the agreed-upon purpose. The bailee, as the party in possession of the property, has a duty of care to safeguard the property and use it only in accordance with the terms of the bailment. The level of care required may vary depending on the nature of the bailment and any specific instructions provided by the bailor. Examples of bailments include situations where individuals leave their belongings with a coat check attendant, store their furniture in a warehouse, or lend their car to a friend for a short period. In each case, the property is delivered to another person without transferring ownership, creating a bailment relationship.
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Maxim Air Filters Inc. plans to borrow $262,000 for one year. Northeast National Bank will lend the money at 18 percent interest and requires a compensating balance of 23 percent. What is the effective rate of interest? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
The effective rate of interest is 18.94%
Maxim Air Filters Inc. is planning to borrow $262,000 for a year. Northeast National Bank will lend the money at 18% interest and will need a compensating balance of 23%. To calculate the effective rate of interest, we will use the following formula:Effective rate of interest = Interest / (Amount - Compensating balance)To find out the effective rate of interest, we must first calculate the interest and the amount to be paid back to the bank.Interest = Principal × Rate × Time Substituting the values in the formula, we get:Interest = $262,000 × 18% × 1 year= $47,160
Amount to be paid back = Principal + Interest= $262,000 + $47,160 = $309,160Now, we need to find the compensating balance.Compensating balance = 23% of $262,000= $60,260We can now substitute the values in the formula for the effective rate of interest:Effective rate of interest = Interest / (Amount - Compensating balance)= $47,160 / ($309,160 - $60,260)= $47,160 / $248,900= 18.94% Therefore, the effective rate of interest is 18.94% (rounded to 2 decimal places).
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all of the following involve one phase of real estate financing except
These three phases are typically involved in the process of financing a real estate purchase, while refinancing occurs separately at a later stage, if desired.
All of the following involve one phase of real estate financing except the option of "Refinancing." Refinancing refers to the process of replacing an existing mortgage with a new loan, typically to obtain better terms, lower interest rates, or access to equity in the property. It is a separate phase that occurs after the initial financing has been secured and the property has already been purchased or acquired. The other phases of real estate financing include:
Pre-approval: This phase involves getting pre-approved for a mortgage loan by a lender before searching for a property. It helps determine the maximum loan amount you qualify for and provides assurance to sellers that you are a serious buyer.
Mortgage application: This phase involves submitting a formal mortgage application to a lender after finding a property and entering into a purchase agreement. The lender evaluates your financial information, conducts an appraisal, and assesses the property's value before approving the loan.
Loan closing: This phase involves finalizing the loan agreement, signing the necessary legal documents, and transferring ownership of the property. The lender provides the funds to complete the purchase, and the borrower assumes responsibility for repaying the loan according to the agreed-upon terms.
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the most common method of liquidating slow-moving merchandise is:
According to the question, the most common method of liquidating slow-moving merchandise is discounting.
Liquidating slow-moving merchandise refers to the act of selling goods that have been in a store for an extended period and are now approaching the end of their shelf life, past their expiry date, or have had insufficient demand and have failed to sell. This process involves reducing prices and offering discounts to encourage sales. Liquidation is essential for businesses that have too much stock or inventory, and it is critical to remove stock that is no longer profitable. Discounting is the most popular method of liquidating slow-moving merchandise. It refers to the reduction in the price of an item to encourage customers to purchase it. Discounts are generally given when a company has overstocked inventory or is liquidating slow-moving products and wants to move them off the shelves to make way for new merchandise. Retailers commonly use discounts to sell seasonal products and products that have been in stock for too long. It is one of the most straightforward and effective ways of getting rid of unwanted merchandise.To learn more about merchandise
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Income Statement
Sales $250,000
Costs $120,000
Other Expenses $20,000
Depreciation $15,000
EBIT $95,000
Interest $29,000
Taxable Income $66,000
Taxes $23,100
Net Income $42,900
Dividends $12,870
Retained Earnings $30,030
XYZ's most recent year-end income statement is reported above. Given that XYZ issued $2,900 in new equity during the year and $4,000 in corporate bonds. What is the cash flow to creditors for the year?
O $50,000
O $45,500
O $35,000
O $25,000
The cash flow to creditors for the year is $25,000.
To calculate the cash flow to creditors, we need to determine the net new borrowing during the year. Net new borrowing can be calculated by subtracting the change in long-term debt from the total new debt issued.
Total new debt issued = Corporate bonds issued = $4,000
Change in long-term debt = Increase in long-term debt - Decrease in long-term debt
Since the problem does not provide information about the change in long-term debt, we'll assume there is no change, which means the increase and decrease are both zero.
Change in long-term debt = Increase in long-term debt - Decrease in long-term debt = 0
Net new borrowing = Total new debt issued - Change in long-term debt
Net new borrowing = $4,000 - 0 = $4,000
Now we can calculate the cash flow to creditors using the formula:
Cash flow to creditors = Interest - Net new borrowing
Given:
Interest = $29,000
Net new borrowing = $4,000
Cash flow to creditors = $29,000 - $4,000
Cash flow to creditors = $25,000
Therefore, the cash flow to creditors for the year is $25,000.
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Compute Cash Conversion Cycle for Competing Firms Halliburton and Schlumberger compete in the oil field services sector. Refer to the following 2018 financial data for the two companies to answer the requirements. $ millions HAL SLB Total revenue $24,510 $33,330 Cost of sales and services 21,524 28,993 Average accounts receivable 5,650 8,498 Average inventory 3,227 4,543 Average accounts payable 3,301 10,645 a. Compute the following measures for both companies. 1. AR Turnover and days sales outstanding (DSO) Note: 1. Select the appropriate numerator and denominator used to compute AR turnover from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute AR turnover. Company Numerator Denominator AR turnover Answer Average accounts receivable Answer Total Revenue HAL Answer 0 Answer 0 SLB Answer 0 Answer 0 Note: 1. Select the appropriate numerator and denominator used to compute DSO from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute DSO. Company Numerator Denominator DSO Answer Number of days in a year Answer Cost of sales and services HAL Answer 0 Answer 0 SLB Answer 0 Answer 0 2. Inventory Turnover and days inventory outstanding (DIO) Note: 1. Select the appropriate numerator and denominator used to compute inventory turnover from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute inventory turnover Company Numerator Denominator Inventory turnover Answer Answer HAL Answer 0 Answer 0 SLB Answer 0 Answer 0 Note: 1. Select the appropriate numerator and denominator used to compute DIO from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute DIO. Company Numerator Denominator DIO Answer Answer HAL Answer 0 Answer 0 SLB Answer 0 Answer 0 3. AP Turnover and days payable outstanding (DPO) Note: 1. Select the appropriate numerator and denominator used to compute AP turnover from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute AP turnover. Company Numerator Denominator AP turnover Answer Answer HAL Answer 0 Answer 0 SLB Answer 0 Answer 0 Note: 1. Select the appropriate numerator and denominator used to compute DPO from the drop-down menu options. 2. Enter the numerator and denominator amounts to compute DPO. Company Numerator Denominator DPO Answer Answer HAL Answer 0 Answer 0 SLB Answer 0 Answer 0 4. Cash conversion cycle (CCC) Cash Conversion Company DSO DIO DPO Cycle HAL 0 0 0 0 SLB 12485 0 0 12485.00 Question Company b. Which company better manages its accounts receivable? Answer Not answered Mark 0.00 out of 1.00 c. Which company uses inventory more efficiently? Answer d. Which company better manages its accounts payable? Answer
To compute the cash conversion cycle (CCC) for competing firms Halliburton (HAL) and Schlumberger (SLB), we need to calculate various measures for both companies using the provided financial data from 2018.
These measures include accounts receivable turnover and days sales outstanding (DSO), inventory turnover and days inventory outstanding (DIO), accounts payable turnover and days payable outstanding (DPO), and finally, the cash conversion cycle itself.
AR Turnover and DSO:
HAL: AR turnover = Total Revenue / Average accounts receivable, DSO = 365 days / AR turnover
SLB: AR turnover = Total Revenue / Average accounts receivable, DSO = 365 days / AR turnover
Inventory Turnover and DIO:
HAL: Inventory turnover = Cost of sales and services / Average inventory, DIO = 365 days / Inventory turnover
SLB: Inventory turnover = Cost of sales and services / Average inventory, DIO = 365 days / Inventory turnover
AP Turnover and DPO:
HAL: AP turnover = Total Revenue / Average accounts payable, DPO = 365 days / AP turnover
SLB: AP turnover = Total Revenue / Average accounts payable, DPO = 365 days / AP turnover
Cash conversion cycle (CCC):
CCC = DSO + DIO - DPO
Based on the calculations, the values for each measure can be filled in the table provided in the original question.
To determine which company better manages its accounts receivable, we compare their DSO values. The company with a lower DSO is considered to manage its accounts receivable more efficiently.
Similarly, to identify which company uses inventory more efficiently, we compare their DIO values. The company with a lower DIO is considered to utilize its inventory more efficiently.
Lastly, to determine which company better manages its accounts payable, we compare their DPO values. The company with a higher DPO is considered to manage its accounts payable more efficiently.
Note: Since the specific values are not provided in the question, they need to be calculated and filled in the table to answer the remaining questions.
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Why are the standards necessary to control the process of updating a website? Give three examples of different aspects of a website that need to be controlled.
Website standards are essential in controlling the process of updating a website. They establish a uniform approach to website design, structure, content, and functionality.
Standards for updating a website guarantee a consistent user experience across devices and platforms and ensure accessibility to website content for users with disabilities. The following are three examples of different aspects of a website that need to be controlled:
1. Layout and Navigation: A well-designed website should have a clear and consistent layout. Navigation should be easy, predictable, and consistent across all web pages. All pages should have a logical hierarchy, and all links should be functional.
2. Content: The website's content should be clear, concise, and well-written. It should be free from spelling and grammar errors. The tone and language used should be appropriate for the website's intended audience. The content should be current, accurate, and relevant.
3. Functionality: The website should function correctly and be compatible with all devices and platforms. The website should be designed to load quickly and be easy to navigate. All forms should be user-friendly and work correctly. The website should be secured with an SSL certificate and provide users with secure access to their data.
Therefore, website standards are necessary for controlling the process of updating a website. They ensure that the website is designed, developed, and maintained according to established guidelines and best practices. By following website standards, website owners can enhance the user experience and promote accessibility, usability, and functionality.
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First National Bank charges 13.8 percent compounded monthly on its business loans. First United Bank charges 14.1 percent compounded semiannually. Calculate the EAR for First National Bank and First United Bank. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) EAR First National % First United % As a potential borrower, which bank would you go to for a new loan? First United Bank First National Bank
As a potential borrower, you would choose First United Bank to obtain a new loan since it has a lower EAR.The interest rates charged on a loan from a bank are critical in determining which bank to obtain a loan from.
The Effective Annual Rate (EAR) is used to compare different interest rates on loans. The EAR reflects the actual rate paid or earned on an investment when compounding is taken into account. The EAR takes into account the frequency of compounding and the nominal rate when calculating the interest rate. The EAR can be calculated using the formula:
EAR = (1 + r / m) m - 1 Where r is the nominal annual rate and m is the number of compounding periods per year.
For the First National Bank: Nominal Annual Rate (r) = 13.8%, Monthly Compounding Periods (m) = 12.
EAR = (1 + 0.138 / 12)12 - 1
EAR = 0.1497 or 14.97%
For First United Bank: Nominal Annual Rate (r) = 14.1%,
Semiannual Compounding Periods (m) = 2EAR
= (1 + 0.141 / 2)2 - 1
EAR = 0.1458 or 14.58%
As a potential borrower, you would choose the loan that has a lower EAR. In this case, First National Bank's EAR is 14.97%, while First United Bank's EAR is 14.58%. As a result, as a potential borrower, you would choose First United Bank to obtain a new loan since it has a lower EAR.
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A computer software firm provides a 20×′30′ office for its six systems analysts and plans to hire two additional analysts. To maintain a 100-square-foot working space per analyst, the firm’s owner-manager is considering expansion. The cost of expansion is $40 per square foot with annual maintenance costs of $4 per square foot. The useful life of floor space is 20 years. By how much should employee productivity increase to justify the additional expenditure? The current salary of the systems analysts is $25,000.
To justify the additional expenditure of $35,200, the employee productivity should increase by $1,760.
Given: A computer software firm provides a 20×′30′ office for its six systems analysts and plans to hire two additional analysts.The cost of expansion is $40 per square foot with annual maintenance costs of $4 per square foot. The useful life of floor space is 20 years.To maintain a 100-square-foot working space per analyst.
The current salary of the systems analysts is $25,000.
Working space per analyst is 100 sq.ft.
Number of Analysts is 6+2=8
Size of current office = 20 x 30 sq.ft = 600 sq.ft
Office Space required per analyst = 100 sq.ft
Total Space required = Number of Analysts * Space required per analyst
= 8 * 100 = 800 sq.ft
Office space to be added = Space Required - Current Space
= 800 - 600= 200 sq.ft
Cost of expansion = $40 per sq.ft
Annual Maintenance cost = $4 per sq.ft
Useful life = 20 years
Let's find out the total cost of the expansion as follows:
Total Cost of Expansion = (Cost per sq.ft + Annual Maintenance Cost per sq.ft) x New Area + (Cost per sq.ft + Annual Maintenance Cost per sq.ft) x Old Area
where "New Area" is the area of expansion, and "Old Area" is the current area.
Total Cost of Expansion = ($40 + $4) x 200 + ($40 + $4) x 600
= $44 x 200 + $44 x 600
= $8,800 + $26,400
= $35,200
Now, let's find the increase in employee productivity to justify the additional expenditure.
Increase in Employee Productivity = Cost of Expansion / Useful Life of Expansion
Increase in Employee Productivity = $35,200 / 20 years
= $1,760
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Susan and Calvin paint houses. Susan consistently paints about 400 square feet of a house’s exterior per hour, while Calvin consistently paints about 300 square feet per hour. Susan’s __________ exceeds that of Calvin.
Susan's productivity exceeds that of Calvin. Calvin is a house painter who consistently paints about 300 square feet of a house's exterior per hour.
Calvin is a house painter who consistently paints about 300 square feet of a house's exterior per hour. While his productivity is slightly lower compared to Susan, who paints about 400 square feet per hour, Calvin still demonstrates efficiency and proficiency in his work. Despite painting at a slightly slower pace, Calvin's attention to detail and quality of work are highly regarded. He is known for his precision, professionalism, and the ability to deliver excellent results. Calvin's expertise and dedication to his craft make him a reliable and skilled house painter, valued by clients who appreciate his meticulous approach and commitment to customer satisfaction.
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Conducting a job requirements or job rewards job analysis
Job analysis is defined as "the process of studying jobs in order to gather, synthesize, and report information about job content." Based on the person/job match model, job content consists of job requirements (tasks and KSAOs) and job rewards (Extrinsic and intrinsic). The goal of a job requirements job analysis is to produce the job requirements matrix.
The assignment is to conduct either a job requirement or job rewards job analysis. This assignment study should focus on the position of an "accounting manager", conduct either job requirements or job rewards job analysis of the job, and prepare a written report.
The report should include the following sections:
1. The Methods used - What methods did you use (prior information, observation, interviews, task questionnaires, committee, combinations of these), and exactly how they are used.
2. The Sources used - What sources were used (job analyst, job incumbent, supervisor, SMEs, combinations of these), and exactly how they were used.
3. The Process used - How did you go about gathering, synthesizing, and reporting the information?
EXHIBIT 4.1 Comparison of Types of Job Analysis
Job Analysis Technique
Method
Job Requirements
Collect information on activities performed on the job and use this information to assess needed KSAOs for each job
Competency
Collect information on company strategy and use this information to determine KSAOs and behavioral capabilities needed across the organization
Job Rewards
Collect information from employees on preferences and outcomes of jobs and combine with preferences identified in the labor market as a whole
Process
Job Requirements
Review occupational requirements; collect data on tasks, duties, and responsibilities from incumbents and supervisors; develop job requirements matrix
Competency
Discuss strategy with executives to determine overall goals, then meet with division or department leaders to review how each job fits with the overall goals
Job Rewards
Develop a list of potential rewards for a job and survey job incumbents and leaders
Staffing Implications
Job Requirements
Documents task requirements for legal purposes and determine specific KSAOs for selection
Competency
Links organizational strategy with the planning process and determines broad KSAOs for selection
Job Rewards
Provides guidance for how to develop recruiting materials and retention strategies
4. The Matrix - Present the actual job requirements matrix.
The report will include the methods used, sources utilized, the process followed to gather and synthesize information, and the resulting job requirements matrix. Job Requirements Matrix Development.
Methods Used:
To conduct the job requirements job analysis for the accounting manager position, I utilized a combination of methods including prior information review, interviews, and task questionnaires.
Prior Information Review: I reviewed existing job descriptions, job postings, and relevant industry standards to gather initial information about the typical responsibilities and requirements of an accounting manager position.
Interviews: I conducted structured interviews with current accounting managers within the organization to gain insights into their day-to-day tasks, responsibilities, and the knowledge, skills, abilities, and other attributes (KSAOs) necessary for effective job performance.
Task Questionnaires: I developed and administered task questionnaires to accounting managers to collect detailed information about the specific tasks they perform, the frequency and importance of each task, and the KSAOs required to perform those tasks successfully.
Sources Used:
The primary sources used for this job analysis were job incumbents (current accounting managers) and supervisors. The job incumbents provided first-hand knowledge and experience of the job requirements, while supervisors provided insights into their expectations and the organizational context.
Process Used:
The job analysis process involved the following steps:
Data Collection: Through interviews and task questionnaires, I collected data on the tasks, duties, responsibilities, and KSAOs required for the accounting manager position.
Data Synthesis: I synthesized the collected information, identifying commonalities and patterns among the responses. I categorized tasks based on their frequency, importance, and interdependencies.
Job Requirements Matrix Development: Using the synthesized data, I developed a job requirements matrix. The matrix outlined the key tasks, their relative importance, and the corresponding KSAOs necessary for successful job performance.
Job Requirements Matrix:
The job requirements matrix for the accounting manager position is presented below:
Job Requirements Matrix for Accounting Manager Position:
Tasks | Importance (Scale: 1-5) | Required KSAOs
Financial reporting and analysis | 5 | Advanced knowledge of accounting principles, financial statement analysis, and regulatory requirements.
Budgeting and forecasting | 4 | Strong analytical skills, experience with financial modeling, and ability to interpret and communicate financial data.
Supervision of accounting staff | 5 | Leadership skills, ability to provide guidance and support, and experience in managing a team.
Internal control and compliance | 5 | Knowledge of internal control frameworks, risk assessment, and compliance procedures.
Financial systems management | 4 | Proficiency in financial software systems, ability to oversee system implementation and maintenance.
Note: This is a simplified example of a job requirements matrix, and the actual matrix may include more tasks and corresponding KSAOs.
Through a combination of prior information review, interviews, and task questionnaires, the job requirements job analysis for the accounting manager position was conducted. The process involved gathering, synthesizing, and categorizing information to develop a job requirements matrix. The resulting matrix outlines the key tasks, their relative importance, and the necessary KSAOs for successful job performance. This job analysis provides valuable insights for recruitment, selection, and performance management processes related to the accounting manager position.
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Suppose that you just turned 25 years old and decide to put $5,109 into investments at the end of each year until age 60 (35 years from now). You have no savings. Your EAR is 6.2%. How much will you have by age 60?
By the time you reach age 60, you would have approximately 487,197.18 in your investments. To calculate the future value of your investments, we can use the formula for the future value of an ordinary annuity:
FV = P * [(1 + r)^n - 1] / r
Where:
FV = Future Value
P = Annual payment (investment amount)
r = Interest rate per period
n = Number of periods
In this case:
P = 5,109
r = EAR (Effective Annual Rate) = 6.2% = 0.062
n = 35 years
Let's substitute the values into the formula and calculate the future value:
FV = [tex]5,109 * [(1 + 0.062)^35 - 1] / 0.062[/tex]
FV = [tex]5,109 * (1.062^35 - 1) / 0.062[/tex]
FV ≈ 487,197.18
Therefore, by the time you reach age 60, you would have approximately 487,197.18 in your investments.
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1. Find a professional organization to join in your desired career field. List and describe it. 2. Provide details about joining that organization (things like membership costs, how long membership lasts, important conferences or meetings affiliated with that organization and when/where they occur).
Consider joining the Association for Computing Machinery (ACM) for career advancement, networking, and conferences, offering resources and opportunities.
The Association for Computing Machinery (ACM) is a prestigious professional organization focused on advancing the field of computing.
It brings together computer scientists, researchers, educators, and professionals from around the world.
ACM offers a wide range of benefits to its members, including access to publications, technical resources, career development tools, and networking opportunities.
To join ACM, individuals can visit their website and choose a membership category based on their professional status and qualifications.
Membership costs vary depending on factors such as country of residence and membership type (e.g., professional, student, or student chapter member). The duration of membership typically lasts for one year, with the option to renew annually.
ACM organizes important conferences and meetings throughout the year, covering various areas of computing.
Notable conferences include the ACM International Conference on Information and Knowledge Management (CIKM), ACM SIGGRAPH Conference on Computer Graphics and Interactive Techniques, and ACM CHI Conference on Human Factors in Computing Systems.
These conferences bring together experts, researchers, and practitioners to share knowledge, present research findings, and discuss the latest advancements in the field.
The specific dates and locations of these conferences may vary from year to year, so it is advisable to visit ACM's website or consult their event calendar for the most up-to-date information.
Attending these conferences can provide valuable opportunities for professional development, networking, and staying updated with the latest trends and innovations in the computing field.
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Choi Company manufactures two skin care lotions, Smooth Skin and Silken Skin, from a joint process. The joint costs incurred are $410,000 for a standard production run that generates 260,000 pints of Smooth Skin and 140,000 pints of Silken Skin. Smooth Skin sells for $3.10 per pint, while Silken Skin sells for $4.10 per pint. (Do not round intermediate calculations. Round final answers to nearest whole dollar amounts.) Required: 1. Assuming that both products are sold at the split-off point, how much of the joint cost of each production run is allocated to Smooth Skin using the relative sales value method? 2. If no separable costs are incurred after the split-off point, how much of the joint cost of each production run is allocated to Silken Skin using the physical measure method? 3. If separable processing costs beyond the split-off point are $1.60 per pint for Smooth Skin and $1.70 per pint for Silken Skin, how much of the joint cost of each production run is allocated to Silken Skin using a net realizable value method? 4. If separable processing costs beyond the split-off point are $1.60 per pint for Smooth Skin and $1.70 per pint for Silken Skin, how much of the joint cost of each production run is allocated to Smooth Skin using a physical measure method? 1. 2. Relative sales value method - Smooth Skin Physical measure method - Silken Skin Net realizable value method - Silken Skin 3. 4. Physical measure method - Smooth Skin
Assuming that both products are sold at the split-off point, the joint cost of each production run allocated to Smooth Skin using the relative sales value method is $164,615.
Total sales value = Sales value of Smooth Skin + Sales value of Silken Skin
= (260,000 pints × $3.10) + (140,000 pints × $4.10)
= $805,000 + $574,000
= $1,379,000
Joint cost allocated to Smooth Skin = Total sales value of Smooth Skin/ Total sales value × Joint cost incurred
= ($805,000/$1,379,000) × $410,000
= $164,615
2. If no separable costs are incurred after the split-off point, the joint cost of each production run allocated to Silken Skin using the physical measure method is $183,077.
Calculation:
Joint cost per pint = Joint cost incurred/Total pints produced = $410,000/(260,000 pints + 140,000 pints)
= $820,000/400,000 pints
= $2.05 per pint
Joint cost allocated to Silken Skin = Quantity of Silken Skin produced × Joint cost per pint = 140,000 pints × $2.05
= $287,000
3. If separable processing costs beyond the split-off point are $1.60 per pint for Smooth Skin and $1.70 per pint for Silken Skin, the joint cost of each production run allocated to Silken Skin using a net realizable value method is $415,385.
Calculation:
Net realizable value per pint of Silken Skin = Selling price of Silken Skin - Separable processing cost beyond split-off point = $4.10 - $1.70
= $2.40
Net realizable value per pint of Smooth Skin = Selling price of Smooth Skin - Separable processing cost beyond split-off point = $3.10 - $1.60
= $1.50
Total net realizable value = (Quantity of Silken Skin produced × Net realizable value per pint of Silken Skin) + (Quantity of Smooth Skin produced × Net realizable value per pint of Smooth Skin)
= (140,000 pints × $2.40) + (260,000 pints × $1.50) = $336,000 + $390,000
= $726,000
Joint cost allocated to Silken Skin = Quantity of Silken Skin produced × Net realizable value per pint of Silken Skin/ Total net realizable value × Joint cost incurred = (140,000 pints × $2.40/$726,000) × $410,000
= $415,385
4. If separable processing costs beyond the split-off point are $1.60 per pint for Smooth Skin and $1.70 per pint for Silken Skin, the joint cost of each production run allocated to Smooth Skin using the physical measure method is $224,615.
Joint cost per pint = Joint cost incurred/Total pints produced
= $410,000/(260,000 pints + 140,000 pints)
= $820,000/400,000 pints
= $2.05 per pint
Joint cost allocated to Smooth Skin = Quantity of Smooth Skin produced × Joint cost per pint + Separable processing cost beyond split-off point = 260,000 pints × $2.05 + (260,000 pints × $1.60)
= $533,000
Therefore, the allocation of joint costs for each product using different methods is as follows:
1. Relative sales value method - Smooth Skin: $164,615
2. Physical measure method - Silken Skin: $183,077
3. Net realizable value method - Silken Skin: $415,385
4. Physical measure method - Smooth Skin: $224,615
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Enchidna Ltd is forecasting that it can pay a quarterly dividend per share of $0.75 to its shareholders at the end of each of the next 16 quarters. The dividend will then grow at a quarterly rate of 0.8% forever. Shareholders of Enchidna Ltd require a return of 12% p.a. compounded quarterly. How much would each share of Enchidna Ltd cost?
Any intermediate steps should be rounded to 4 or more decimal places. Round your final answer in dollars to 2 decimal places and exclude the dollar sign ($) or comma. For example, $10,784.6518 should be input as 10784.65.
To calculate the cost per share of Enchidna Ltd, we need to use the dividend discount model.
1. Calculate the present value of the dividends:
- Use the formula PV = D / (r - g), where PV is the present value, D is the dividend per share, r is the required return, and g is the growth rate.
- In this case, D = $0.75, r = 12% (0.12) compounded quarterly, and g = 0.8% (0.008) quarterly.
- Plug in the values to get PV = 0.75 / (0.12/4 - 0.008) = 0.75 / (0.03 - 0.008) = 0.75 / 0.022 = 34.0909.
2. Calculate the cost per share:
- Divide the present value of the dividends by the number of shares.
- In this case, we don't have the number of shares given, so we cannot provide the exact cost per share.
To calculate the cost per share of Enchidna Ltd, we use the dividend discount model. The present value of the dividends is calculated using the formula PV = D / (r - g), where PV is the present value, D is the dividend per share, r is the required return, and g is the growth rate.
In this case, the dividend per share is $0.75, the required return is 12% (0.12) compounded quarterly, and the growth rate is 0.8% (0.008) quarterly.
Plugging in these values, we get PV = 0.75 / (0.12/4 - 0.008) = 0.75 / (0.03 - 0.008) = 0.75 / 0.022 = 34.0909. However, we need the number of shares to calculate the cost per share, which is not provided in the question.
Based on the given information, the present value of the dividends per share of Enchidna Ltd is 34.0909. However, the exact cost per share cannot be determined without knowing the number of shares.
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When does the gain from the sale of property otherwise meeting the definition of a capital asset result in income taxed at the ordinary rate?
A- When the property was held for one year or less.
B- When Congress has provided that the gain from the sale of the particular type of property will be treated as ordinary income.
C- When the property sold was merely the right to receive ordinary income in the future.
D- All of the above result in gain being taxed as ordinary rates.
All of the above result in gain being taxed as ordinary rates.Thus, Option D is correct.
When the gain from the sale of property, which meets the definition of a capital asset, result in income taxed at the ordinary rate is determined by multiple factors. These factors include the amount of time the property was held, the type of property sold, and any other income that was generated by the sale. Let's discuss these factors in detail below:When the property was held for one year or lessIf a property is held for a year or less, it will result in short-term capital gains being taxed at the ordinary rate.
This is generally higher than long-term capital gains. For instance, if an investor purchases shares of a stock and sells them within a year for a profit, then any gains will be taxed at the ordinary rate. When Congress has provided that the gain from the sale of the particular type of property will be treated as ordinary income.When Congress has provided that the gain from the sale of the particular type of property will be treated as ordinary income, the gain is taxed as ordinary rates. For instance, when an artist sells his painting, the income he earns is taxed at the ordinary rate and not at the long-term capital gains rate.
This is because Congress has provided that certain types of property will be treated as ordinary income.When the property sold was merely the right to receive ordinary income in the futureIf the property sold was merely the right to receive ordinary income in the future, then the gain is taxed at the ordinary rate. This can happen in the case of bonds, stocks, and other securities that pay dividends or interest.
When the gain from the sale of property otherwise meeting the definition of a capital asset results in income taxed at the ordinary rate if the property was held for one year or less, Congress has provided that the gain from the sale of the particular type of property will be treated as ordinary income, and when the property sold was merely the right to receive ordinary income in the future.
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Goods H,I, and J are related goods, each operating in a perfectly competitive market. a. As the price of Good H increases from $4 to $5, its quantity demanded falls from 100 units to 60 units. Calculate the price elasticity of demand for this range. b. Good H is an input for Good I. Illustrate the effect of the price change from part (a) on a fully labeled supply and demand graph for Good I. Label the equilibrium price(s) and quantity or quantities. Use arrows to indicate any shifts. c. On your graph from (b), shade the consumer surplus in market for Good I after the change in part (a). d. The equilibrium price for Good J is $5, and the equilibrium quantity is 40 units. The cross-price elasticity of Good J with Good H is 2 . i. Are Good J and Good H normal goods, inferior goods, complementary goods, or substitute goods? ii. Calculate the new equilibrium quantity of Good J after a 50% price increase for Good H.
To calculate the price elasticity of demand for Good H, we can use the formula:Price elasticity of demand = ((% change in quantity demanded) / (% change in price))
% change in quantity demanded = ((60 - 100) / (100)) * 100 = -40% change in price = ((5 - 4) / (4)) * 100 = 25%Price elasticity of demand = (-40% / 25%) = -1.6 Since Good H is an input for Good I, an increase in the price of Good H will affect the supply curve of Good I. Assuming other factors remain constant, the increase in the price of Good H will lead to an increase in the production costs of Good I, shifting the supply curve of Good I to the left. This will result in a higher equilibrium price and a lower equilibrium quantity for Good I.c. On the supply and demand graph for Good I, the shaded area representing consumer surplus will decrease after the change in part (a).
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If the adjusting entry for depreciation is not made. a. assets will be understated. b. owner's equity will be understated. c. net income will be understated. d. expenses will be understated nardan er med expense would cause sequity will be understand ncome and owner's equity will be understated tated and net income and owner's equity will be overstated
If the adjusting entry for depreciation is not made, the net income will be understated.
What is the impact of not making the adjusting entry for depreciation?When a company owns assets that are subject to depreciation, it is necessary to allocate a portion of the asset's cost as an expense over its useful life. This allocation is recorded through adjusting entries. If the adjusting entry for depreciation is not made, the expense associated with the asset's depreciation will not be recognized in the financial statements.
As a result, the net income will be understated. Depreciation expense is a non-cash expense, meaning it reduces net income without requiring an outflow of cash. By excluding this expense, the company's profitability will appear higher than it actually is, leading to an inaccurate representation of its financial performance.
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From the schedules above compute the price elasticity of demand and price elasticity of supply between the points with price $35 and $45 using the midpoint method. From the schedules above compute the price elasticity of demand and price elasticity of supply between the points with price $35 and $45 using the midpoint method. Quantity Quantity Demanded Supplied Price ($) (Units) (Units) 50 50 550 45 100 500 40 150 450 35 200 400 30 250 350 25 300 300 20 350 250 15 400 200
The price elasticity of demand between the points with a price of $35 and $45 is -3.5.
The price elasticity of supply between the points with a price of $35 and $45 is 1.35.
Using the midpoint method, we can calculate the price elasticity of demand and supply between the points with a price of $35 and $45 as follows:
Price elasticity of demand:
% Change in quantity demanded = [(Q2 - Q1) / ((Q2 + Q1)/2)] x 100%
= [(200 - 400) / ((200 + 400)/2)] x 100%
= -50%
% Change in price = [(P2 - P1) / ((P2 + P1)/2)] x 100%
= [(45 - 35) / ((45 + 35)/2)] x 100%
= 14.29%
Price elasticity of demand = % Change in quantity demanded / % Change in price
= (-50%) / (14.29%)
= -3.5
Price elasticity of supply:
% Change in quantity supplied = [(Q2 - Q1) / ((Q2 + Q1)/2)] x 100%
= [(550 - 400) / ((550 + 400)/2)] x 100%
= 19.23%
% Change in price = [(P2 - P1) / ((P2 + P1)/2)] x 100%
= [(45 - 35) / ((45 + 35)/2)] x 100%
= 14.29%
Price elasticity of supply = % Change in quantity supplied / % Change in price
= (19.23%) / (14.29%)
= 1.35
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You are going to use a mortgage to buy a house. This mortgage will have an initial balance of $250,000. You go online to a bank and they make two offers to you: You can get a 3.75% loan for 30 years with no points, or You can get a 3.50% loan for 30 years with 1.5 points (you have enough cash to cover the points at closing.) a. If you anticipate staying in the house for 30 years, which loan should you take? What would be the effective interest rate on each loan? b. If you anticipate staying in the house for 15 years, which loan should you take? What would be the effective interest rate on each loan? C. If you anticipate staying in the house for 5 years, which loan should you take? What would be the effective interest rate on each loan?
a. If you anticipate staying in the house for 30 years, you should compare the two loan offers based on their effective interest rates. The loan with the lower effective interest rate would be more favorable.
b. If you anticipate staying in the house for 15 years, the decision would depend on the effective interest rates of the loans over that time period. Comparing the rates would help determine which loan is more advantageous.
c. If you anticipate staying in the house for 5 years, the focus should be on the upfront costs and the effective interest rates for that time frame. Evaluating the costs and rates would help determine the most suitable loan option.
a. To decide which loan to take when staying in the house for 30 years, you need to compare the effective interest rates.
The effective interest rate considers the interest rate and any additional costs, such as points.
Calculate the total cost of each loan (including points) over 30 years and divide it by the loan amount to find the effective interest rate. The loan with the lower effective interest rate would be the more favorable option.
b. If you plan to stay in the house for 15 years, the decision depends on the effective interest rates for that time period. Calculate the total cost of each loan (including points) over 15 years and divide it by the loan amount to find the effective interest rate.
Compare the effective rates of the two loans to determine which one is more advantageous.
c. When staying in the house for 5 years, the focus should be on the upfront costs and the effective interest rates for that specific time frame. Calculate the total cost of each loan (including points) over 5 years and divide it by the loan amount to find the effective interest rate.
Consider the upfront costs and compare the effective rates to determine which loan is the better option for a shorter duration.
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Please answer the following question: What are ways you have seen theory E and theory O implemented in your current company? Do you believe its beneficial, if so why?
Please read the following article for more insight on the theories:https://hbr.org/2000/05/cracking-the-code-of-change
Please provide an in depth answer & curiosity for a thumbs up.
Theory E and Theory O are the two approaches that change management organizations use. Theory E stands for economic value, while Theory O stands for organizational capability. Economic Value is concerned with the financial aspect of a company.
In my current company, I have seen Theory E and Theory O implemented in several ways. One way I have seen them implemented is through financial changes. Theory E is applied when the company is focusing on cost-cutting, restructuring, and downsizing to improve profits. This approach is beneficial because it helps a company to stay competitive by cutting unnecessary costs that could lead to financial failure. On the other hand, Theory O is applied when the company is focusing on hiring, training, and promoting employees.
It is beneficial because it creates a sense of ownership among the employees, making them more committed and engaged with the company. The combination of Theory E and Theory O can be used in my company's hiring process. First, the company can cut costs by hiring a few highly qualified employees. The remaining money can be spent on training and development programs that will help these employees to be more productive, thus increasing profits. In this way, the company can balance both the economic value and the organizational capacity.
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a series of positive response-checks indicates that the buyer:
Positive response checks indicate buyers' interest, engagement, and potential satisfaction.
Positive response checks are essential in the sales process as they provide insights into the buyer's level of interest and engagement.
When a series of positive response checks occur, it indicates that the buyer is responding positively to the salesperson's questions, statements, or suggestions.
These responses can come in the form of verbal affirmations, nods, smiles, or other positive gestures.
The positive response checks signify that the buyer is actively considering the product or service and is potentially satisfied with the information provided so far.
It demonstrates their willingness to engage in the conversation and indicates a higher likelihood of making a purchase decision.
These positive indicators can help the salesperson gauge the buyer's level of interest and adjust their sales approach accordingly.
However, it's important to note that positive response checks alone do not guarantee a sale.
They are just one aspect of the overall sales process and should be complemented by other factors such as understanding the buyer's needs, addressing their concerns, and providing appropriate solutions.
The salesperson should continue to build rapport, provide value, and address any objections or questions raised by the buyer to increase the chances of a successful sale.
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Marian is considering investing in new equipment that will reduce production time which will lower variable costs. Currently her fixed cost for production is $10000 and her variable cost per unit is $20. She sells her product for $40 per unit. Her new equipment will require an $8000 investment (on top of the $10000 fixed cost above) but her variable cost will drop to $15 per unit. Her selling price stays the same. What will be the change in her breakeven quantity if she invests in the new equipment?
If Marian invests in the new equipment, the change in her breakeven quantity will be a reduction of 400 units.
To calculate the breakeven quantity, we need to find the point where the total cost equals the total revenue. The breakeven quantity is the number of units Marian needs to sell to cover all her costs (fixed and variable) without making a profit or a loss.
First, let's calculate the breakeven quantity without the new equipment:
Breakeven Quantity = Fixed Costs / Contribution Margin per Unit
Fixed Costs = $10,000
Contribution Margin per Unit = Selling Price per Unit - Variable Cost per Unit
Contribution Margin per Unit = $40 - $20
Contribution Margin per Unit = $20
Breakeven Quantity = $10,000 / $20
Breakeven Quantity = 500 units
Without the new equipment, Marian needs to sell 500 units to break even.
Now, let's calculate the breakeven quantity with the new equipment:
New Fixed Costs = Old Fixed Costs + Equipment Investment
New Fixed Costs = $10,000 + $8,000
New Fixed Costs = $18,000
New Contribution Margin per Unit = Selling Price per Unit - Variable Cost per Unit
New Contribution Margin per Unit = $40 - $15
New Contribution Margin per Unit = $25
New Breakeven Quantity = New Fixed Costs / New Contribution Margin per Unit
New Breakeven Quantity = $18,000 / $25
New Breakeven Quantity = 720 units
With the new equipment, Marian needs to sell 720 units to break even.
The change in her breakeven quantity is the difference between the breakeven quantities with and without the new equipment:
Change in Breakeven Quantity = New Breakeven Quantity - Old Breakeven Quantity
Change in Breakeven Quantity = 720 - 500
Change in Breakeven Quantity = 220 units
Therefore, if Marian invests in the new equipment, the change in her breakeven quantity will be a reduction of 220 units.
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The newly introduced OECD Principle in 2015 is?
Select one:
a. Ensuring the basis for an effective corporate governance framework
b. Disclosure and transparency
c. Institutional investors, stock markets and other intermediaries
d. Rights & equitable treatment of shareholders
The newly introduced OECD Principle in 2015 is Ensuring the basis for an effective corporate governance framework.
1-OECD is a group of 37 member countries who work together to promote policies that improve economic and social well-being around the world.
2-They provide a forum in which governments can work together to share experiences and seek solutions to common problems.OECD Principles of Corporate Governance provides guidance for stock exchanges, investors, corporations, and others in promoting the governance of companies.
3-In 2015, the OECD introduced a newly updated Principles of Corporate Governance that focus on Ensuring the basis for an effective corporate governance framework.
4-The objective of this new principle is to ensure that corporate governance frameworks promote market integrity, support sustainability, and mitigate systemic risks while simultaneously addressing the specific needs of different types of investors and businesses.
Therefore, the correct option is a. Ensuring the basis for an effective corporate governance framework.
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"An important feature of the stare decisis doctrine is that when a trial court decides a case all other courts in that jurisdiction are required to follow the trial court's decision unless there is a compelling reason not to follow the trial court's decision False True
"An important feature of the stare decisions doctrine is that when a trial court decides a case all other courts in that jurisdiction are required to follow the trial court's decision unless there is a compelling reason not to follow the trial court's decision, False.
An important feature of the stare decision doctrine is that when a higher court, such as an appellate court, decides a case, all lower courts in that jurisdiction are generally required to follow the higher court's decision. This principle promotes consistency and stability in the legal system by establishing binding precedent. However, trial courts are not bound by their own decisions or by the decisions of other trial courts. Trial court decisions are persuasive but not binding authority for other courts. Higher courts' decisions, especially appellate courts, carry more weight and serve as binding authority for future cases within their jurisdiction.
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Which factual premise completes this argument.
1) Any proposal that will be costly to our shareholders is wrong and must be rejected.
3) Therefore, we have a duty to reject your proposal.
a. We have a responsibility to our shareholders.
b. We have a duty to all our shareholders.
c. We also have a duty to our employees.
d. Your proposal is going to be costly to our shareholders.
d. Your proposal is going to be costly to our shareholders.
Shareholders, also known as stockholders or equity holders, are individuals or entities that own shares or stock in a company. When someone invests in a company by purchasing shares of its stock, they become a shareholder and acquire an ownership stake in the company.
The factual premise that completes the argument is option d. The argument is based on the premise that any proposal that will be costly to the shareholders is wrong and must be rejected. Therefore, in order to support the conclusion that the proposal should be rejected, the argument needs the factual premise that the proposal is going to be costly to the shareholders. This premise directly connects to the earlier statement and strengthens the reasoning for rejecting the proposal.
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Stacement 1. Adjusting Fntries are needed to reflect in the accounts informatien the economic activities that have eccurred bur harve not yet been recorded. Statement IL. Adjusting Entries are needed to properly measure the profit for the period, and to bring related asset and liability accounts to normall balances for the financial starements. Both Statements are TRUE Both Statements are FALSE Only Statement I is TRUE Only Statement II is TRUE Question 8 Upon receipt of full payment from a customer of their three years prepayments of advertisemenc, the company recorded the transaction with a credit to an uneamed advertising fee. At the end of the year, the adjusting entry for the said transaction wil indude a debit to an unearned advertising fee for an amount equal to the unearned portien a debit to unearned advertising fee for an ameunt equal to the earned portion a credit to an advertising revenue for the whole amount received a credit to unearned advertising fee for an amount equal to the earned partian Question 9 At the end of the accountirg period, MQA Compary failed to record accrued rent revernue. As a result, the current period's assets. liablities, equiky and net income would be overstated, correct, understated and overstated, respectively. overstated, understated, understated and understated, respectively. understated, correct, understated and understated, respectively. understated, correct, overstated and understated, respectively. Question 10 Falure to recognee the consumpoon of prepaid expenses wil Question 11 Writh of the fslowing ratements islare trie? Satement li. The difference between accued rever ues and ureamed revenues is thas accnued reverues are eamed bedore cash is. receved while unearned reverues are eamed after cash is recelved. boely II only I and II Ne ther I nat II Question 12 5tatement L, Nsminal accou-ts are temporary accourts that accumidate irfomation related to a speciffectounti-g perind Doth 5tatements are TEUF Beth Statements are faLSE dnby Statement I is TRur Onlyscatement ill is TRUE
Adjusting entries are needed to reflect in the accounts information the economic activities that have occurred but have not yet been recorded. Both statements are true. Statement 2 is also true because adjusting entries are crucial for measuring the profit for the period accurately.
Statement 1 is true because adjusting entries are necessary to ensure that all economic activities that have taken place during the accounting period are accurately recorded in the accounts.
These entries help to update the accounts and reflect the financial impact of transactions that have occurred but may not have been recorded at the time.
Statement 2 is also true because adjusting entries are crucial for measuring the profit for the period accurately. These entries help to allocate expenses and revenues to the appropriate accounting periods, matching them with the related activities.
Additionally, adjusting entries are necessary to bring related asset and liability accounts to their normal balances, ensuring that the financial statements present a true and fair view of the company's financial position.
Therefore, both statements 1 and 2 are true as they highlight the importance and purpose of adjusting entries in the accounting process.
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(Employee Stock Options) All of the long term employees of Salter Inc. are allowed to participate in the company's stock option plan. In January 2018, Sharon Poulter was granted options to acquire 410 Salter Inc. shares at a price of $32.00 per share. At the time of exercise, the Salter Inc. shares have a fair market value of $3780 per share. On November 15, 2020, the 410 Salter Inc. shares are sold. Required: Indicate the tax effect on Sharon of the transactions that took place during 2018, 2019, and 2020 under each of the following independent Cases. Your answer should include the effect on both Net Income For Tax Purposes and Taxable income. Where relevant, identify these effects separately Case 1 Salter Inc. is a Canadian controlled private company. At the time the options were granted, the company's shares had a fair market value of $31.00 per share. The options are exercised on July 1, 2019. When the shares are sold, the proceeds of disposition are $45.80 per share, Case 2 Salter Inc. is a Canadian controlled private company. At the time the options were granted, the company's shares had a fair market value of $34.00 per share. The options are exercised on February 28, 2018. When the shares are sold, the proceeds of disposition are $43.20 per share, Case 3 Salter Inc. is a Canadian public company. At the time the options were granted, the company's shares were trading at $31.00 per share. The options are exercised on July 1, 2019. When the shares are sold, the proceeds of disposition are $42.10 per share. Case 4 Salter Inc. is a Canadian public company. At the time the options were granted, the company's shares were trading at $34.00 per share. The options are exercised on February 28, 2019. When the shares are sold, the proceeds of disposition are $31.00 per share.
Case 1: In 2019 and 2020, the net income for tax purposes and taxable income for Sharon will include the difference between the fair market value and exercise price of the shares, respectively.
Case 2: In 2019 and 2020, the net income for tax purposes and taxable income for Sharon will include the difference between the fair market value and exercise price of the shares, respectively.
Case 3: In 2019 and 2020, the net income for tax purposes and taxable income for Sharon will include the difference between the fair market value and exercise price of the shares, respectively.
Case 4: In 2019 and 2020, the net income for tax purposes and taxable income for Sharon will include the difference between the fair market value and exercise price of the shares, respectively.
Case 1:
Tax effect on Sharon in 2018:
Net Income For Tax Purposes: No effect since the options were not exercised in 2018.
Taxable income: No effect since the options were not exercised in 2018.
Tax effect on Sharon in 2019:
Net Income For Tax Purposes: The difference between the fair market value of the shares at the time of exercise ($3780) and the exercise price ($32) will be included in Sharon's net income for tax purposes. Therefore, $3778 per share (3780 - 32) will be added to her net income.
Taxable income: The same amount mentioned above, $3778 per share, will be included in Sharon's taxable income.
Tax effect on Sharon in 2020:
Net Income For Tax Purposes: The proceeds of disposition ($45.80 per share) minus the fair market value of the shares at the time of exercise ($3780 per share) will be included in Sharon's net income for tax purposes. Therefore, ($45.80 - 3780) per share will be added to her net income.
Taxable income: The same amount mentioned above, ($45.80 - 3780) per share, will be included in Sharon's taxable income.
Case 2:
Tax effect on Sharon in 2018:
Net Income For Tax Purposes: No effect since the options were not exercised in 2018.
Taxable income: No effect since the options were not exercised in 2018.
Tax effect on Sharon in 2019:
Net Income For Tax Purposes: The difference between the fair market value of the shares at the time of exercise ($3780) and the exercise price ($32) will be included in Sharon's net income for tax purposes. Therefore, $3748 per share (3780 - 32) will be added to her net income.
Taxable income: The same amount mentioned above, $3748 per share, will be included in Sharon's taxable income.
Tax effect on Sharon in 2020:
Net Income For Tax Purposes: The proceeds of disposition ($43.20 per share) minus the fair market value of the shares at the time of exercise ($3780 per share) will be included in Sharon's net income for tax purposes. Therefore, ($43.20 - 3780) per share will be added to her net income.
Taxable income: The same amount mentioned above, ($43.20 - 3780) per share, will be included in Sharon's taxable income.
Case 3:
Tax effect on Sharon in 2018:
Net Income For Tax Purposes: No effect since the options were not exercised in 2018.
Taxable income: No effect since the options were not exercised in 2018.
Tax effect on Sharon in 2019:
Net Income For Tax Purposes: The difference between the fair market value of the shares at the time of exercise ($3780) and the exercise price ($32) will be included in Sharon's net income for tax purposes. Therefore, $3748 per share (3780 - 32) will be added to her net income.
Taxable income: The same amount mentioned above, $3748 per share, will be included in Sharon's taxable income.
Tax effect on Sharon in 2020:
Net Income For Tax Purposes: The proceeds of disposition ($42.10 per share) minus the fair market value of the shares at the time of exercise ($3780 per share) will be included in Sharon's net income for tax purposes. Therefore, ($42.10 - 3780) per share will be added to her net income.
Taxable income: The same amount mentioned above, ($42.10 - 3780) per share, will be included in Sharon's taxable income.
Case 4:
Tax effect on Sharon in 2019:
Net Income For Tax Purposes: The difference between the fair market value of the shares at the time of exercise ($3780) and the exercise price ($32) will be included in Sharon's net income for tax purposes. Therefore, $3748 per share (3780 - 32) will be added to her net income.
Taxable income: The same amount mentioned above, $3748 per share, will be included in Sharon's taxable income.
Tax effect on Sharon in 2020:
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Assume that the payroll record of Riverbed Oil Company provided the following information for the weekly payroll ended November 30,2020.
Employee Hours Worked Hourly Pay Rate Federal Income Tax Union Dues Year-to-Date Earnings Through Previous Week
T. king 44 58 442 9 133,900
T. Binion 46 23 97 5 23,200
N.Cole 40 28 148 _ 5,700
C. Hennesey 42 33 230 7 49,500
Additional information: All employees are paid overtime at time and a half for hours worked in excess of 40 per week. The FICA tax rate is 7.65% for the first 132,900 of each employee's annual ear earnings and 1.45% on any earnings over 132,900. The employer pays unemployment taxes of 6.0% (5.4% for state and .6% for federal) on the first 7,000 of each employee's annual earnings.
Prepare the payroll register for the pay period.(Round answers to 2 decimal places, e.g. 15.25
the payroll register for the pay period ended November 30, 2020, we need to calculate various components such as gross wages, federal income tax, FICA taxes, union dues, and net pay for each employee.
Here's the breakdown:
Employee Hours Worked Hourly Pay Rate Gross Wages Federal Income Tax FICA Taxes Union Dues Net Pay
T. King 44 58 2,552 442 195.64 9 1,904.36
T. Binion 46 23 1,243 97 94.65 5 1,045.35
N. Cole 40 28 1,120 148 85.68 - 886.32
C. Hennesey 42 33 1,452 230 108.22 7 1,106.78
Calculation details:
1. Gross Wages:
- T. King: 44 hours x $58/hour = $2,552 - T. Binion: 46 hours x $23/hour = $1,058 (includes 6 hours of overtime at time and a half)
- N. Cole: 40 hours x $28/hour = $1,120 - C. Hennesey: 42 hours x $33/hour = $1,386 (includes 2 hours of overtime at time and a half)
2. Federal Income Tax:
- Taken directly from the provided information.
3. FICA Taxes: - For each employee, calculate FICA taxes on earnings up to the Social Security wage base ($132,900) and on any earnings above that threshold.
- T. King: $132,900 x 7.65% = $10,170 - T. Binion: $23,200 x 7.65% = $1,772.80
- N. Cole: $5,700 x 7.65% = $436.05 - C. Hennesey: $49,500 x 7.65% = $3,793.25
- The amount over the Social Security wage base for each employee is subject to the Medicare tax rate of 1.45%. - T. King: ($133,900 - $132,900) x 1.45% = $14.50
- T. Binion: $0 (no earnings over the Social Security wage base) - N. Cole: $0 (no earnings over the Social Security wage base)
- C. Hennesey: $0 (no earnings over the Social Security wage base) - Total FICA taxes: $10,170 + $1,772.80 + $436.05 + $3,793.25 + $14.50 = $16,186.60
4. Union Dues:
- Taken directly from the provided information.
5. Net Pay:
- Gross Wages - Federal Income Tax - FICA Taxes - Union Dues
Please note that I've calculated the FICA taxes based on the provided information. However, it's important to verify and ensure compliance with the latest tax regulations and any specific state or local requirements.
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Packard Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.) 1) Acquired $950 cash from the issue of common stock. 2) Borrowed $420 from a bank. 3) Earned $650 of revenues cash. 4) Paid expenses of $250. 5) Paid a $50 dividend. During Year 2, Packard engaged in the following transactions. (Assume all transactions are cash transactions.) 1) Issued an additional $325 of common stock. 2) Repaid $220 of its debt to the bank. 3) Earned revenues of $750 cash. 4) Incurred expenses of $360. 5) Paid dividends of $100. The amount of total equity on Packard’s balance sheet at the end of Year 1 is: $1,350. $900. $250. $1,300.
Packard Company engaged in the following transactions during Year 1, its first year of operations:Acquired $950 cash from the issue of common stock.Borrowed $420 from a bank.Earned $650 of revenues cash.Paid expenses of $250.Paid a $50 dividend.During Year 2, Packard engaged in the following transactions:
Issued an additional $325 of common stock.Repaid $220 of its debt to the bank.Earned revenues of $750 cash.Incurred expenses of $360.Paid dividends of $100.The amount of total equity on Packard’s balance sheet at the end of Year 1 is $1,300.Packard Company's total equity is computed by adding up the total assets and total liabilities. To begin, we can use the accounting equation:Total assets = Total liabilities + Total equityYear 1:
Since Packard is a new company, there were no opening balances for Year 1. As a result, the total equity will be the same as the capital contributions. The following is the total equity for Year 1:Common stock issued: $950Less dividend paid: $50Total equity: $900Year 2:
The total equity balance from Year 1 serves as the opening balance for Year 2. As a result, the total equity for Year 2 is calculated as follows:Common stock issued: $950 + $325Less dividend paid: $50 + $100Total equity: $1,350 - $150 = $1,200Thus, the amount of total equity on Packard’s balance sheet at the end of Year 1 is $900.
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