Audit documentation, also known as working papers, refers to the written records and supporting materials that auditors prepare and maintain during an audit engagement. These documents serve several purposes in the audit process:
1. Support and evidence:
Audit documentation provides evidence to support the auditor's findings, conclusions, and opinions. It helps demonstrate that the audit was conducted in accordance with professional standards and provides a basis for the auditor's conclusions and opinions.
2. Retention of information:
Audit documentation acts as a repository for all relevant information obtained and considered during the audit. It includes records of the procedures performed, the auditor's observations, and any significant issues identified. By documenting the audit work, it ensures that information is retained for future reference or review.
3. Review and supervision:
Audit documentation facilitates the review and supervision of the audit engagement by the engagement partner and other members of the engagement team. It enables them to understand the work performed, assess the appropriateness of the evidence obtained, and provide necessary guidance or supervision.
4. Subsequent audits:
Audit documentation helps auditors in subsequent audits by providing a reference point for understanding the work performed in previous periods. It helps auditors to identify trends, recurring issues, or changes in the client's circumstances that may impact the current audit.
5. Quality control and peer review:
Audit documentation plays a crucial role in ensuring the quality of the audit engagement. It enables the engagement team to demonstrate compliance with applicable professional standards, internal policies, and quality control procedures. Additionally, audit documentation may be subject to external peer reviews, where other auditors review the work performed to ensure compliance with professional standards.
Overall, the purpose of audit documentation is to provide a clear record of the audit work performed, the evidence obtained, and the conclusions reached. It enhances the quality, reliability, and transparency of the audit process, thereby increasing the confidence of users in the auditor's work.
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Brothers Hamy and Herman Hausyerday began operations of their machine shop ( H \& H Tool, Incorpórated) on January 1 , 2020. The annual reporting period ends December 31 . The trial balance on January 1,2021 , follows (the amounts are rounded to thousands of dollars to simplify): Transections and events during 2021 (summarized in thousands of dollars) follow: a. Borrowed $13 cash on March 1 using a short-term note. b. Purchased land on March 2 for future building site; paid cash, $7. c. Issued additional shares of common stock on April 3 for $28. d. Purchased software on July 4, \$12 cash. e. Purchased supplies on account on October 5 for future use, $17. f. Paid accounts payable on November 6,$14. 9. Signed a $30 service contract on November 7 to start February 1, 2022. h. Recorded revenues of $170 on December 8 , including $45 on credit and $125 collected in cash. 1. Recognized salaries and wages expense on December 9,$90 paid in cash. f. Collected accounts receivable on December 10,$29. Dato for adjusting journal entries as of December 31 : k. Unrecorded amortization for the year on software, $5. 1. Supplies counted on December 31, 2021, \$11. m. Depreciation for the year on the equipment, $7. n. Interest of $2 to accrue on notes payable. 0. Salaries and wages earned but not yet paid or recorded, $11. p. Income tax for the year was $9. It will be paid in 2022 . Required: 9-a. How much net income did H&H Tool, Incorporated, generate during 2021 ? What was its net profit margin? 9-b. Is the company financed primarily by liabilities or stockholders' equity? 9-c. What is its current ratio? Complete this question by entering your answers in the tabs below. How much net income did H \& H Tool, Incorporated, generate during 2021? What was its net profit margin? (Enter "Net) Income" in thousands of dollars. Round "Net Profit Margin" to 1 decimal place.)
To calculate the net income and net profit margin for H&H Tool, Incorporated, we need to consider the revenues and expenses for the year 2021.
Revenues:
- Cash collected: $125
- Credit sales: $45
Total revenues: $125 + $45 = $170
Expenses:
- Salaries and wages: $90
- Amortization (software): $5
- Depreciation (equipment): $7
- Interest expense: $2
- Income tax expense: $9
Total expenses: $90 + $5 + $7 + $2 + $9 = $113
Net income: Total revenues - Total expenses = $170 - $113 = $57,000
Net profit margin: (Net income / Total revenues) * 100
Net profit margin: ($57,000 / $170,000) * 100 = 33.5%
Therefore, H&H Tool, Incorporated generated a net income of $57,000 during 2021, and its net profit margin was 33.5%.
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During 2022, its first year of operations as a delivery service, Flounder Corp. entered into the following transactions. Issued shares of common stock to investors in exchange for $137,000 in cash. Borrowed $55,000 by issuing bonds. Purchased delivery trucks for $63,000 cash. Received $18,000 from customers for services performed. Purchased supplies for $6,600 on account. Paid rent of $5,900 Performed services on account for $10,700. Paid salaries of $26,700. Paid a dividend of $11,500 to shareholders. 4. 5. 6. 7 8. 9. Using the following tabular analysis show the effect of each transaction on the accounting equation. Put explanations for changes to Stockholders' Equity in the far right column. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced, see Illustration 3-4 for example.) Q Assets Accounts + Receivable Cash Supplies + Equipment (1) $ $ $ (2) (3) (5) (6) (7) (8) (9) $ $ $ Liabilities Accounts = Payable Bonds Payable Common + Stock + Equipment $ $ 1 Q $ $ $ $ uestion 1 OT Stockholders' Equity Retained Earnings Revenues Dividends Expenses - $ $
Performing services on account caused an increase in accounts receivable. Payment of dividends caused a decrease in retained earnings.
In 2022, Flounder Corp. entered into the following transactions: Issued shares of common stock to investors in exchange for $137,000 in cash. Borrowed $55,000 by issuing bonds. Purchased delivery trucks for $63,000 cash. Received $18,000 from customers for services performed.
Purchased supplies for $6,600 on account. Paid rent of $5,900 Performed services on account for $10,700. Paid salaries of $26,700. Paid a dividend of $11,500 to shareholders.Now, we will use the tabular analysis to show the effect of each transaction on the accounting equation.
AssetsAccounts + Receivable CashSupplies+ Equipment
(1)$18,000 $18,000
(2)$137,000 $137,000
(3)$55,000 $55,000
(5)$6,600 $6,600
(6)($63,000) ($63,000)
(7)$10,700 $10,700
(8)($5,900) ($5,900)
(9)($26,700) ($26,700)
Total$29,800 $157,000 $6,600 ($63,000) $129,400
LiabilitiesAccounts = PayableBonds Payable
Common + Stock + Equipment($6,600)($55,000)$137,000
Total($6,600) ($55,000) $137,000 $75,400
Stockholders' EquityRetained
EarningsRevenuesDividendsExpenses [tex]$29,800$10,700$26,700($11,500)Total$29,800$10,700$26,700($11,500)$55,700[/tex].
Explanation for changes to Stockholders' Equity in the far-right column: Issuance of Common Stock in exchange for cash caused an increase in cash and common stock. Purchase of delivery trucks for cash caused a decrease in cash and an increase in equipment.
Receiving $18,000 from customers for services performed caused an increase in accounts receivable.Purchase of supplies on account caused an increase in accounts payable. Payment of rent caused a decrease in cash.Payment of salaries caused a decrease in cash.
Performing services on account caused an increase in accounts receivable. Payment of dividends caused a decrease in retained earnings.
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eep Purple Inc has sales of $1,387,400, costs of goods sold of $891,400, inventory of $188,936, and accounts receivable of $94,800. Pink Floyd has sales of $2,125,900 osts of goods sold of $1,125,200, inventory of $225,600, and accounts receivable of $205,700. Which company is better in managing inventory and why? Multiple Choice Pink Floyd; fewer days in inventory Pink Floyd; lower inventory turnover Deep Purple; lower inventory turnover Deep Purple; fewer days in inventory Pink Floyd; higher amount of inventory carried
To determine which company is better in managing inventory, we need to calculate the inventory turnover and the days in inventory for both companies.
Inventory Turnover = Cost of Goods Sold / Average Inventory
Days in Inventory = 365 days / Inventory Turnover
For Deep Purple Inc:
Cost of Goods Sold = $891,400
Average Inventory = ($188,936 + $94,800) / 2 = $141,868
Inventory Turnover = $891,400 / $141,868 = 6.28
Days in Inventory = 365 days / 6.28 = 58.17 days
For Pink Floyd:
Cost of Goods Sold = $1,125,200
Average Inventory = ($225,600 + $205,700) / 2 = $215,650
Inventory Turnover = $1,125,200 / $215,650 = 5.21
Days in Inventory = 365 days / 5.21 = 70.09 days
Based on the calculations, Deep Purple Inc has a higher inventory turnover (6.28) compared to Pink Floyd (5.21).
by selling and stock its inventory at a faster rate. Additionally, Deep Purple Inc has fewer days in inventory (58.17) compared to Pink Floyd (70.09), which further suggests that Deep Purple Inc is better in managing its inventory as it takes fewer days to sell its inventory.
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A Raisin in the Sun study questions
11. Many of the problems the Youngers must confront are specific to the African American family; others are problems that every family, Black or White, must deal with. What in the play do you see as specifically African American, and what is universal?
12. Through most of the play, Walter is shown in a state of arrested development, still very much like a teenager. Do you feel, as Mama comes to, that because for many years she refused to cede the position of head of the family to him, she is to blame for the deficiencies in his character?
13. Though three of them work as servants, Mama and her family believe that "being any kind of a servant wasn’t a fit thing for a man to have to be". This belief goes against one that, because of Booker T. Washington’s influence, had value in the Black community at that time: that all labor was possessed of dignity. Do you side with Mama on this issue, or with Washington? What are your reasons? Is this purely a racial matter, or is it a problem which all races must solve?
14. Asagai sees "what the New World hath finally wrought" in Beneatha—but Beneatha, with a darker vision, sees it in Walter. In what way are they both right? How has American society, with its strengths and weaknesses, shaped both Beneatha and Walter?
15. In answer to someone who thought the play’s ending was a happy one, Lorraine Hansberry retorted: "I invite him to come live in one of the communities where the Youngers are going!" Do you share the opinion that the ending is happy, such as promising hope, or greater strength for the Youngers as a family?
11. The problems that the Youngers have to face in the play, A Raisin in the Sun, are primarily African-American in nature.
Although some of these problems, such as housing and poverty, are common to all races and social groups,
they are far more prevalent among African Americans. The Younger family's problems are exacerbated by
the fact that they are African American.
They are refused housing because of their race, and they struggle to make ends meet because of poverty and
a lack of education.12. Mama's role in Walter's character development is a contentious issue.
While Mama's unwillingness to relinquish control of the family's finances has undoubtedly contributed to Walter's lack of responsibility and his inability to act like an adult,
it is unfair to place the blame solely on Mama. Mama has been a widow for a long time, and she has had to work hard
to keep her family afloat. She is simply trying to do
what she believes is best for her family.13. Mama and her family's belief that being a servant is not a "fit thing for a man" is a racial issue.
It stems from a belief that African American men are superior to other men, and that they should be
doing something more important than serving.
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Marginal and average tax rates Partner A, a single taxpayer, is one of two partners in a small business. As such, she receives pass-through income that is taxed at her personal tax rates. After all adjustments and deductions have been made, including the 20% qualified business income deduction, she is preparing to calculate her taxes owed for the year. Using the tax rate schedule given here, perform the following: a. Calculate the tax liability, after-tax earnings, and average tax rates for the following levels of partnership earnings before taxes: $10,900;$82,200; $297,000;$496,000;$1.1 million; $1.5 million; and $1.9 million. b. Plot the average tax rates (measured on the y-axis) against the pretax income levels (measured on the x-axis). What generalization can be made concerning the relationship between these variables? a. Calculate the tax liability, after-tax earnings, and average tax rates for the following levels of partnership earnings before taxes: $10,900;$82,200; $297,000;$496,000;$1,100,000;$1.5 million; and $1.9 million. The tax liability for earnings before taxes of $10,900 is $ (Round to the nearest dollar.)
Marginal and average tax rates Partner A, a single taxpayer, is one of two partners in a small business to calculate the tax liability, after-tax earnings, and average tax rates for the given levels of partnership earnings before taxes, we will use the tax rate schedule provided
a. Calculation for tax liability, after-tax earnings, and average tax rates:
Tax liability: $10,900 falls within the 10% tax bracket.
Tax liability = $10,900 * 0.10 = $1,090 (rounded to the nearest dollar)
After-tax earnings: Earnings before taxes - Tax liability
After-tax earnings = $10,900 - $1,090 = $9,810
Average tax rate: Tax liability / Earnings before taxes * 100
Average tax rate = ($1,090 / $10,900) * 100 ≈ 10.00%
Tax liability: $82,200 falls within the 24% tax bracket.
Tax liability = $82,200 * 0.24 = $19,728 (rounded to the nearest dollar)
After-tax earnings: Earnings before taxes - Tax liability After-tax earnings = $82,200 - $19,728 = $62,472
Average tax rate = ($19,728 / $82,200) * 100 ≈ 24.00%
Tax liability: $297,000 falls within the 32% tax bracket.
Average tax rate = ($95,040 / $297,000) * 100 ≈ 32.00%
Earnings before taxes: $496,000
Tax liability: $496,000 falls within the 35% tax bracket.
After-tax earnings = $496,000 - $173,600 = $322,400
Earnings before taxes: $1,100,000
Tax liability: $1,100,000 falls within the 37% tax bracket.
Tax liability = $1,100,000 * 0.37 = $407,000
After-tax earnings = $1,100,000 - $407,000 = $693,000
Average tax rate: Tax liability / Earnings before taxes * 100
Average tax rate = ($407,000 / $1,100,000) * 100 ≈ 37.00%
Tax liability: $1,500,000 falls within the 37% tax bracket.
Tax liability = $1,500,000 * 0.37 = $555,000
After-tax earnings: Earnings before taxes - Tax liability
After-tax earnings = $1,500,000 - $555,000 = $945,000
Average tax rate: Tax liability / Earnings before taxes * 100
Average tax rate = ($555,000 / $1,500,000) * 100 ≈ 37.00%
Tax liability: $1,900,000 falls within the 37% tax bracket.
Tax liability = $1,900,000 * 0.37 = $703,000
After-tax earnings = $1,900,000 - $703,000 = $1,197,000
Average tax rate = ($703,000 / $1,900,000) * 100 ≈ 37.00%
b. Plotting the average tax rates against the pretax income levels:
The generalization we can make concerning the relationship between average tax rates and pretax income levels is that as the pretax income levels increase, the average tax rates also tend to increase. This pattern is consistent with a progressive tax system where higher income levels are subject to higher tax rates.
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Q 6 On June 1. 2020, Sam borrows $2000 at 11% simple interest. She pays $800 on October 17. 2020; and 5500 on February 2, 2021. What is the balance due on April 18, 2021? (indicate the payments on a time line)
The balance due on April 18, 2021, is -$4280.09. This means that Sam still owes $4280.09 to the lender.
To calculate the balance due on April 18, 2021, we need to track the payments made by Sam and subtract them from the original loan amount of $2000. The interest is calculated at a simple interest rate of 11%.
Let's track the payments made by Sam on a timeline:
June 1, 2020: Sam borrows $2000.
October 17, 2020: Sam pays $800.
February 2, 2021: Sam pays $5500.
To calculate the balance due on April 18, 2021, we need to subtract the payments made from the original loan amount.
First, let's calculate the interest rate accrued from June 1, 2020, to April 18, 2021:
Interest = Principal × Rate × Time
= $2000 × 0.11 × (321/365)
= $19.91 (rounded to two decimal places)
Next, subtract the total payments made by Sam:
Balance due = Principal + Interest - Total payments
= $2000 + $19.91 - ($800 + $5500)
= $2000 + $19.91 - $6300
= -$4280.09 (negative value indicates a balance due)
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The Omnigroup stocks and sells Kipor generators. The firm works 364 days in a year. The firm has gathered the following information from its Kathmandu office: Demand =300 units per day Cost =$500 per unit Ordering cost =$1,000 per order| Holding cost =20% per year The firm's supply chain manager wants to calculate the: a) Optimal lot size (EOQ) for the Kipor generators b) Annual holding costs for the Kipor generators c) Annual ordering costs for the Kipor generators d) Cycle inventory (in units, and value) of the Kipor generators
a) Optimal lot size (EOQ) for the Kipor generators: Approximately 775 units.
b) Annual holding costs for the Kipor generators: $77,500.
c) Annual ordering costs for the Kipor generators: $50,448.39.
d) Cycle inventory (in units): 387.5 units. Cycle inventory (value): $193,750.
a) The optimal lot size (EOQ) for the Kipor generators can be calculated using the Economic Order Quantity formula. EOQ = sqrt((2 * demand * ordering cost) / holding cost). Plugging in the given values, we have EOQ = sqrt((2 * 300 * $1,000) / 0.2) = sqrt(600,000) ≈ 774.6 units. Therefore, the optimal lot size for the Kipor generators is approximately 775 units.
b) The annual holding costs for the Kipor generators can be calculated by multiplying the average inventory level by the holding cost per unit. Since EOQ represents the average inventory level, the annual holding costs can be calculated as EOQ * (holding cost per unit) = 775 * ($500 * 0.2) = $77,500.
c) The annual ordering costs for the Kipor generators can be calculated by dividing the total demand by the lot size and then multiplying it by the ordering cost per order. Annual ordering costs = (total demand / EOQ) * ordering cost per order = (300 * 364 / 775) * $1,000 = $50,448.39.
d) The cycle inventory refers to the average inventory level during a complete order cycle. In this case, it is equal to the EOQ divided by 2 since the order is placed when the inventory reaches zero. Therefore, the cycle inventory in units is 775 / 2 = 387.5 units. The cycle inventory value can be calculated by multiplying the cycle inventory in units by the cost per unit, which is 387.5 * $500 = $193,750.
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Discuss the role of Internet Architecture Board (IAB) which support the structure of the Internet and indicate how it would impact e-commerce participants:
The Internet Architecture Board (IAB) provides strategic oversight and guidance for the development and maintenance of the Internet's architectural principles and protocols.
The Internet Architecture Board (IAB) is an advisory body that plays a crucial role in maintaining the structure and functionality of the Internet. It provides strategic direction and oversight for the development of Internet standards and protocols, ensuring that they adhere to the fundamental principles of the Internet.
The IAB is responsible for reviewing and approving protocols proposed by various standardization bodies, such as the Internet Engineering Task Force (IETF). It also works closely with other organizations, including the Internet Corporation for Assigned Names and Numbers (ICANN), to ensure coordination and compatibility in Internet operations.
Regarding its impact on e-commerce participants, the IAB's role in maintaining a robust and secure Internet infrastructure is of great significance. E-commerce heavily relies on a stable and efficient online environment to function effectively. The IAB's efforts to define and maintain Internet protocols and standards directly contribute to the smooth operation of e-commerce platforms.
By providing guidance on Internet architecture, the IAB promotes interoperability and compatibility among different e-commerce systems. This allows business to seamlessly connect with customers, partners, and service providers across the Internet, regardless of the underlying technologies used. The IAB's work ensures that e-commerce participants can rely on a consistent and reliable online ecosystem, fostering trust and enabling the growth of online transactions.
Furthermore, the IAB's focus on security and privacy considerations helps protect e-commerce participants from various cyber threats and data breaches. Its efforts in promoting the adoption of secure communication protocols and encryption standards contribute to safeguarding sensitive information transmitted during online transactions.
In summary, the IAB plays a vital role in supporting the structure of the Internet. Its work has a significant impact on e-commerce participants by ensuring a stable, interoperable, and secure online environment conducive to conducting business transactions effectively and securely
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On 01 November 2018, Sarah Wrangler sold the primary residence that she and Joe had lived in for the amount of R3 750 000. Sarah was the sole owner of the property and had purchased it on 01 October 2009 for the amount of R1 900 000, Sarah improved the property at a cost of R300 000 His employer had sent Joe overseas and Sarah and the children went with him. They were overseas from 1 December 2013 to 1 January 2018. Sarah had remained in the house (after their return and Joe's subsequence death) until date of sale. Whist Joe, Sarah and the children were overseas, they remained mainly resident in South Africa for tax purposes. They did during their absence; contemplate emigrating to the overseas country. In this regard, they put the house on the market for 8 months, starting 01 April 2017. Eventually they decided that they would ultimately like to return to South Africa and took the house off the market (i.e. did not sell) Throughout their time overseas, the house was rented out. No deductions were claimed against the rental income. Required: Calculate and discuss the capital gain effects (after any specific exclusions) for Sarah on the sale of the house. Assume that current tax rates apply for the foreseeable future.
To calculate the capital gain effects for Sarah on the sale of the house, we need to consider the following steps:
1. Determine the base cost: Sarah purchased the property on 01 October 2009 for R1,900,000. Since she also improved the property at a cost of R300,000, the base cost would be R2,200,000 (R1,900,000 + R300,000).
2. Calculate the capital gain: The capital gain is the difference between the selling price and the base cost. The selling price is R3,750,000. Therefore, the capital gain is R3,750,000 - R2,200,000 = R1,550,000.
3. Determine the exclusions: In South Africa, there is a primary residence exclusion. If the property meets certain criteria, a portion of the capital gain may be excluded. However, since the property was rented out during their time overseas, it may not qualify for the exclusion.
It's important to note that you should consult with a tax professional or accountant for specific advice regarding your situation, as tax laws and rates may change over time.
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What are the 6 parts of the financial system and tell me about them.
The financial system is composed of various parts that work together to facilitate the flow of money and financial transactions in an economy. Here are six important components of the financial system:
1. Financial Institutions: These are entities that provide financial services to individuals, businesses, and governments. Examples include banks, credit unions, insurance companies, and investment firms. Financial institutions play a crucial role in intermediating between savers and borrowers, managing risk, and providing access to credit and investment opportunities.2. Financial Markets: These are platforms where buyers and sellers come together to trade financial assets such as stocks, bonds, currencies, and commodities. Financial markets can be physical locations like stock exchanges or electronic platforms like online trading platforms. They enable the efficient allocation of capital, price discovery, and risk management.
3. Central Banks: Central banks are responsible for regulating and overseeing the financial system of a country. They are often the sole authority in charge of issuing and managing the country's currency. Central banks also implement monetary policies to control inflation, stabilize the economy, and promote financial stability. Examples of central banks include the Federal Reserve in the United States and the European Central Bank in the Eurozone.4. Regulatory Authorities: These are government agencies that enforce regulations and supervise financial institutions and markets. Their primary role is to maintain the integrity and stability of the financial system, protect consumers, and ensure fair practices. Regulatory authorities set rules and guidelines that financial institutions must follow to promote transparency, accountability, and risk management.
5. Payment Systems: Payment systems facilitate the transfer of funds between individuals, businesses, and institutions. They include mechanisms such as electronic funds transfer, debit and credit cards, and mobile payment applications. Payment systems ensure the smooth flow of transactions, improve convenience, and enhance financial inclusion.6. Financial Instruments: These are contracts or securities that represent a financial value and can be traded or exchanged. Examples of financial instruments include stocks, bonds, options, futures contracts, and derivatives. Financial instruments enable investors to participate in the financial markets, diversify their portfolios, and manage risks.
Each part of the financial system plays a crucial role in supporting economic activities, allocating resources, and promoting financial stability. By working together, these components help facilitate economic growth and provide individuals and businesses with the financial tools and services they need.
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You need $5000 in five years If you could choose a discount rate of 8 percent or 10 percent, you should always choose the higher rate because you would need a higher starting amount. true or false
When choosing a discount rate, a higher rate would result in a lower present value of future cash flows. Therefore, if you need $5000 in five years, you should choose the lower discount rate to achieve a higher starting amount. So, the statement is false.
When determining the appropriate discount rate for future cash flows, you should consider the concept of the time value of money. A higher discount rate implies a higher opportunity cost of capital and results in a lower present value of future cash flows. In this case, if you need $5,000 in five years, choosing a higher discount rate would actually lead to a lower starting amount.
To calculate the present value of $5,000 in five years, we can use the formula for present value:
Present Value = Future Value / (1 + Discount Rate)^
Assuming an annual compounding period:
Discount Rate of 8%:
Present Value = $5,000 / (1 + 0.08)^5
Present Value = $3,540.85
Discount Rate of 10%:
Present Value = $5,000 / (1 + 0.10)^5
Present Value = $3,170.09
As shown in the calculations, the present value is lower with a higher discount rate. Therefore, if you have a choice between an 8% or 10% discount rate, you should choose the lower rate (8% in this case) to achieve a higher starting amount.
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What are key audit matters? How do these affect the
format of the audit report? (Australian Standards)
Key audit matters (KAMs) are significant matters identified by the auditor during the audit of financial statements that require the most attention and have the greatest impact on the audit report.
In Australia, the inclusion of KAMs in the audit report enhances transparency and provides users of financial statements with valuable insights into the audit process.
Key audit matters (KAMs) are specific matters that the auditor considers to be of most significance in the audit of financial statements. These matters are selected based on their nature, complexity, and the level of judgment or estimation involved. KAMs arise from areas of the financial statements that carry a higher risk of material misstatement or involve significant management judgment.
In Australia, the inclusion of KAMs in the audit report is required under the auditing standards issued by the Australian Auditing and Assurance Standards Board (AUASB). The purpose of including KAMs is to enhance the communication of audit findings and provide users of financial statements with a deeper understanding of the audit process.
The format of the audit report is affected by the inclusion of KAMs. The audit report must contain a separate section specifically addressing the KAMs identified during the audit. This section provides a detailed description of each KAM, including the auditor's assessment of the matter, the audit procedures performed, and the auditor's response to the matter. This information gives stakeholders a clearer understanding of the areas of greatest audit focus and the auditor's observations and conclusions.
By incorporating KAMs into the audit report, the Australian auditing standards aim to increase the transparency and usefulness of the audit report, providing greater insight into the audit process and enhancing the overall quality of financial reporting.
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What would you do? After reading the supplemental materials familiar with the symptoms of fraud, explain what you would do in the following scenario. You have been invited to a business meeting at a local restaurant. Your boss is there as well as a Board member. At the end of the meal, the Board member picks up the bill and pays for everyone's lunch. (Note: assume this is allowable). Your boss rode in the car with you and after everyone has left the restaurant, you notice the boss goes up to the waiter and asks them something but you cannot hear them. The waiter disappears and then comes back with what looks like a receipt from the restaurant and your boss puts it in their wallet. You are asking yourself the following questions: Why would the boss want a copy of the receipt? Is he/she going to turn it in as an expense reimbursement knowing that the Board member paid for the meal?
In this scenario, there are potential red flags that may indicate fraudulent behavior.
Although it is important to approach the situation with caution and not jump to conclusions, it is also necessary to be proactive in addressing potential fraud. Here's what I would do:
1. Observe and gather information: Take note of the boss's actions, including the interaction with the waiter and the receipt. Pay attention to any unusual behavior or signs that may raise suspicion.
2. Document the details: Make a mental or written note of the specific actions and observations you have made, including the date, time, location, and individuals involved. This will help provide a clear record of the events if needed later.
3. Seek clarification: Approach your boss privately in a respectful and non-confrontational manner. Express your curiosity and ask for an explanation regarding their interaction with the waiter and the reason for keeping the receipt. Be attentive to their response and demeanor.
4. Report concerns: If the boss's explanation or behavior raises further suspicion or if you still have doubts about their intentions, it is essential to report your concerns to the appropriate authority within your organization. This may be your supervisor, Human Resources department, or an ethics hotline. Provide them with the documented details and let them handle the investigation.
5. Maintain confidentiality: While it is crucial to address potential fraud, it is equally important to maintain confidentiality throughout the process. Avoid discussing the matter with colleagues or spreading rumors that may harm reputations or hinder the investigation.
By following these steps, you can fulfill your responsibility to report potential fraudulent activity while also ensuring that the situation is handled professionally and objectively by the appropriate authorities within your organization.
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The Western Province of K.S.A. has approved the 2020 budget as follows:
Budgeted 2020 revenues from:
Property taxes $8,000,000
Sales taxes $2,000,000
Appropriations for 2020:
Salaries $7,200,000
Materials $2,000,000
Equipment $200,000
During 2020, the authority has presented the budget revision to increase the amount of
appropriation for salaries by $100,000. The council approved this budget revision.
Required:
a. Prepare the general journal entry necessary to initially record the budget.
b. Prepare the general journal entry necessary to record the budget revision .
You want the solution clear and tidy, I do not want the handwriting because it is not clear.
a. Preparing the general journal entry necessary to initially record the budget. The general journal entry necessary to initially record the budget is shown below: Date Account Titles and Explanation DebitCredit2020Jan.
1Property Taxes Receivable$8,000,000Sales Taxes Receivable$2,000,000 Appropriations for Salaries$7,200,000 Appropriations for Materials$2,000,000Appropriations for Equipment$200,000 Estimated Revenues and Appropriations Budget Estimated Revenues $10,000,000 Appropriations $9,400,000To record estimated revenues and appropriations budget b. Preparing the general journal entry necessary to record the budget revision. The general journal entry necessary to record the budget revision is shown below: Date Account Titles and ExplanationDebitCredit2020Apr. 1 Appropriations for Salaries$100,000Budgetary Fund Balance$100,000. To record budget revision for salaries increase.
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Many corporations around the world have adopted enterprise resource planning (ERP) software. Of the following, which is NOT a true statement? Question content area bottom
A. ERP may not fit every company. B. ERP's demanding nature often forces companies to change the way they do business. C. ERP unites all of a company's major business activities, D. Can fail if insufficient tailoring of the software to fit the company. E. Provides instant access to critical information to topmanagement,
E. Provides instant access to critical information to top management.
Option E is not a true statement. While ERP systems do provide access to critical information, including real-time data, it is not limited to top management alone. ERP software enables information sharing and accessibility across various levels and departments within an organization, allowing employees at different levels to access and utilize relevant data for their respective roles. ERP systems aim to integrate and streamline business processes across an entire organization, facilitating collaboration and decision-making at all levels, not just limited to top management.
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Last month when Holiday Creations, Inc., sold 44,000 units, total sales were $176,000, total variable expenses were $133760, and fixed expenses were $37,000. Required: 1. What is the company's contribution margin (CM) ratio? 2. What is the estimated change in the company's net operating income if it can increase sales volume by 575 units and total sales by $2,300? (Do not round Intermediate calculations.) 1. Contribution margin ratio 2. Estimated change in net operating income
The company's contribution margin ratio is approximately 24% and the estimated change in the company's net operating income, if it can increase sales volume by 575 units and total sales by $2,300, would be a decrease of $36,448.
1. Contribution Margin (CM) Ratio:
The contribution margin ratio is calculated by dividing the contribution margin by total sales.
Contribution Margin = Total Sales - Total Variable Expenses
Contribution Margin = $176,000 - $133,760
Contribution Margin = $42,240
Contribution Margin Ratio = (Contribution Margin / Total Sales) * 100
Contribution Margin Ratio = ($42,240 / $176,000) * 100
Contribution Margin Ratio ≈ 24%
Therefore, the company's contribution margin ratio is approximately 24%.
2.Estimated Change in Net Operating Income:
To estimate the change in net operating income, we need to determine the increase in sales volume and total sales, and then calculate the corresponding change in contribution margin and net operating income.
Increase in Sales Volume = 575 units
Increase in Total Sales = $2,300
Change in Contribution Margin = Contribution Margin Ratio * Increase in Total Sales
Change in Contribution Margin = 24% * $2,300
Change in Contribution Margin = $552
Change in Net Operating Income = Change in Contribution Margin - Increase in Fixed Expenses
Change in Net Operating Income = $552 - $37,000
Change in Net Operating Income = -$36,448
Therefore, the estimated change in the company's net operating income, if it can increase sales volume by 575 units and total sales by $2,300, would be a decrease of approximately $36,448.
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Your firm is considering two projects with the following cash flows: a.) If the appropriate discount rate is 12%, rank the two projects. b.) Which project is preferred if you rank by IRR? c.) Calculate the crossover rate, namely, the discount rate r at which the NPVs of both projects are equal. d.) Should you use NPV or IRR to choose between the two projects? Briefly discuss.
It is generally advisable to prioritize the project with the higher NPV unless there are specific circumstances or constraints that warrant considering other factors, such as differences in investment sizes or risk profiles.
a)Project A, Project B
b)Project B, Project A
a) Based on the given cash flows and a discount rate of 12%, the NPV of Project A is $175,536.66 and the NPV of Project B is $156,044.15. Therefore, the ranking of the projects would be as follows:
1. Project A
2. Project B
b) When ranking by the Internal Rate of Return (IRR), Project A has an IRR of 19.9% and Project B has an IRR of 20.0%. Therefore, the ranking would be as follows:
1. Project B
2. Project A
c) The crossover rate is the discount rate at which the NPVs of both projects are equal. To find the crossover rate, we set the NPVs of both projects equal to each other and solve for the discount rate. Using the given cash flows, we can set up the equation as follows:
300,000 + 75,000(P/F, r%, 1) + 125,000(P/F, r%, 2) + 175,000(P/F, r%, 3) + 250,000(P/F, r%, 4) = 400,000 + 200,000(P/F, r%, 1) + 200,000(P/F, r%, 2) + 200,000(P/F, r%, 3) + 200,000(P/F, r%, 4)
By solving this equation, we find that the crossover rate is approximately 15.61%.
d) When choosing between the two projects, it is generally recommended to use the Net Present Value (NPV) as the primary decision factor. NPV takes into account the time value of money and provides a more accurate measure of profitability. In this case, Project A has a higher NPV than Project B, indicating that it generates more value for the firm.
While IRR can be a useful secondary measure, it has some limitations, such as assuming reinvestment at the project's internal rate of return, which may not always be realistic. Additionally, IRR can sometimes lead to conflicting rankings, as seen in this case, where Project B has a higher IRR but a lower NPV.
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When the value of exports exceeds the value of imports in a country it is called?
When the value of exports exceeds the value of imports in a country it is called a favourable balance of trade.
A country is said to have a favourable balance of trade, or a trade surplus, if its exports surpass its imports. If imports outweigh exports, there is an unfavorable trade balance, or a trade deficit. According to the economic doctrine of mercantilism, which was prevalent in Europe from the 16th to the 18th centuries, a positive trade balance was required to finance a country's purchase of foreign products and maintain its export trade.
This was to be accomplished by establishing colonies that would acquire the home country's products and export raw materials (especially precious metals), which were regarded as an essential source of a country's wealth and power.
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Question 27 1 pts A systematic approach to problem-solving is described as: Innovation Management Immersive Experience Design Thinking Organizational Change Question 28 1 pts Platform innovation is? An online space in which ideas can be exchanged, products and services offered and delivered and a meeting point for different sides of a market Rallway based service innovation Something which requires a large sized established organization in which to operate Only confined to online retailing Three words that describe how managers can think like designers are: All the answers are correct build, test, run empathy, invention, iteration effectiveness, efficiency, efficacy
The systematic approach to problem-solving is called "Design Thinking." Design Thinking is a problem-solving methodology that involves understanding user needs, brainstorming ideas, prototyping, and testing solutions.
Platform innovation refers to an online space where ideas can be exchanged, products and services can be offered and delivered, and different sides of a market can meet. It is not limited to online retailing and can be applied to various industries.
Three words that describe how managers can think like designers are: empathy, invention, iteration. Managers need to empathize with users to understand their needs, be inventive in generating creative ideas, and iterate on solutions through feedback and testing.
I hope this helps! Let me know if you have any further questions.
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An investor holds the stock of Last-But-Not-Least Financials and expects to receive a dividend of $4.75 per share at the end of the year. Stock analysts recently predicted that the bank's dividends will grow at approximately 3 percent a year indefinitely into the future. If this is true, and if the appropriate risk-adjusted cost of capital (discount rate) for the bank is 14 percent, what should be the current price per share of Last-But-Not-Least Financials' stock?
The current price per share of Last-But-Not-Least Financials' stock should be approximately $43.18.
To calculate the current price per share of Last-But-Not-Least Financials' stock, we can use the Gordon Growth Model. According to the model, the stock price is equal to the expected dividend divided by the difference between the discount rate and the dividend growth rate.
First, let's calculate the dividend growth rate: 3% of $4.75 equals $0.1425.
Next, we subtract the dividend growth rate from the discount rate: 14% - 3% equals 11%.
Now, we can calculate the current price per share: $4.75 / 0.11 = $43.18.
Therefore, the current price per share of Last-But-Not-Least Financials' stock should be approximately $43.18.
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The government has proposed a new policy to regulate hazardous waste dump. Historically, the
average cost of such dumps is $10 million, so the proposed plan will charge $10 million to any
company that dumps hazardous waste, no matter the amount dumped. Will this policy
incentivize companies to not dump hazardous waste, or at least to dump less? Why or why not?
Use your toolkit to answer. (1 paragraph max)
Companies may be motivated to reduce their hazardous waste production or find alternative disposal methods to avoid the high cost.
The proposed policy to charge $10 million to any company that dumps hazardous waste, regardless of the amount dumped, may incentivize companies to not dump hazardous waste or at least to dump less.
This is because the fixed cost of $10 million can create a financial burden for companies. If a company dumps a small amount of hazardous waste, it would still have to pay the same $10 million fee as a company that dumps a large amount.
Additionally, the policy signals that the government is taking hazardous waste management seriously, which may further discourage companies from engaging in irresponsible dumping practices.
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cliff company traded in an old truck for a new one. the old truck had a cost of $89,000 and accumulated depreciation of $71,200. the new truck had an invoice price of $139,000. huffington was given a $14,240 trade-in allowance on the old truck, which meant they paid $124,760 in addition to the old truck to acquire the new truck. if this transaction has commercial substance, what is the recorded value of the new truck?
The recorded value of the new truck is $135,440.
To determine the recorded value of the new truck, we need to calculate the gain or loss on the exchange of the old truck and adjust it with the invoice price of the new truck.The carrying value of the old truck is the cost minus accumulated depreciation, which is $89,000 - $71,200 = $17,800. The trade-in allowance is the value received for the old truck, which is $14,240.To calculate the gain or loss, we subtract the trade-in allowance from the carrying value of the old truck: $17,800 - $14,240 = $3,560.Since the transaction has commercial substance, we recognize a gain or loss. In this case, it is a gain of $3,560.To find the recorded value of the new truck, we subtract the gain from the invoice price of the new truck: $139,000 - $3,560 = $135,440.The recorded value of the new truck is $135,440.
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A firm has a straight, downward sloping inverse demand curve. When the slope of the corresponding total revenue curve is negative, the firm has elastic demand.
True or False?
A firm has a straight, downward sloping inverse demand curve is false. When the slope of the corresponding total revenue curve is negative, the firm has inelastic demand, and when the slope is positive, it has elastic demand.
An inverse demand curve is a graphical representation of the demand schedule, which represents the relationship between the price of a commodity and the quantity of goods or services that customers are willing to buy at that price. It depicts the relationship between the price and the quantity demanded, which is the quantity of a good or service that a consumer is willing and able to buy at various price levels. In other words, the inverse demand curve is a plot of the highest price a consumer is willing to pay for a given quantity of a good, which implies a price and quantity inverse relationship.
The total revenue curve is a curve that graphically illustrates how the total revenue of a firm changes as the quantity of output it produces changes. As the price of a commodity increases, the quantity sold of that commodity decreases, and the total revenue decreases. As a result, the slope of the total revenue curve is negative when the demand curve is downward-sloping. When the slope of the total revenue curve is negative, the corresponding demand curve is inelastic, indicating that the quantity of goods demanded is less responsive to changes in price.
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In a short paragraph, define labor union. Explain at least one tactic that labor unions use to get their demands met? Do you think this is an effective tactic that is used against producers/management in order to have worker demands met? Explain.
A labor union is a body that represents employees in their dealings with management.
A labor union, also known as a trade union, is an organization of workers that was formed to advance their collective interests in pay, hours, and working conditions. A labor union can either be national or international, depending on the country in which it is located. A labor union negotiates on behalf of workers with their employers in the hope of securing better pay and working conditions.
One of the most effective tactics that labor unions use to get their demands met is the strike. A strike occurs when union workers refuse to work as a way of protesting against management's treatment of them. A strike is typically held as a last resort when all other attempts to negotiate have failed. Strikes can be effective in getting worker demands met because they put pressure on management to come to an agreement that is favorable to the workers.
While strikes can be effective, they are not always the best way to get demands met. Strikes can be expensive for both workers and management, and they can lead to a loss of productivity and profits.
In addition, strikes can sometimes backfire and make management less willing to negotiate with workers in the future.
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Toyland's production possibilities frontier (PPT) [Total 3 points] (1) Given the table shown below (Toyland's PPF), how many Fire Trucks does Toyland need to give up in order to increase # of Dolls produced from 200 to 300 ? a. 0 b. 50 c. 100 (ib) 150 e. 200 f. 250 (2) Given the table shown, which of the following statements accurately describes the production possibilities for Toyland? a. The opportunity cost of an additional 100 dolls is 50 fire trucks. b. The opportunity cost of an additional 100 dolls is 100 fire trucks. c. Without additional information, it is impossible to determine the opportunity cost of an additional doll. d. The opportunity cost of an additional 100 dolls increases a more dolls are produced. (3) Draw a PPF for the above Toyland Note that the horizontal axis must be for quantity of Dolls, and the vertical axis must be quantity of Fire Truck. [2 pts] 4. The domestic opportunity cost of producing a television in the United States is 20 bushels of wheat. In Korea, the domestic opportunity cost of producing a television is 10 bushels of wheat. In this case: [Extra 1 point] (Select the best answer) a. Korea has a comparative advantage in the production of wheat. b. The United States has a comparative advantage in the production of televisions c. Mutual gains from trade can be obtained if the United States imports televisions from Korea and Korea imports wheat from the United States. d. Mutual gains from trade can be obtained if the United States imports wheat from Korea and Korea imports televisions from the United States.
1: 100 (c)
2: c. Without additional information, it is impossible to determine the opportunity cost of an additional doll.
3: PPF diagram not possible to provide.
4: c. Mutual gains from trade can be obtained if the United States imports televisions from Korea and Korea imports wheat from the United States.
1: Toyland needs to give up 100 Fire Trucks to increase the number of Dolls produced from 200 to 300.
By examining the given table, we can see that the increase in Dolls from 200 to 300 requires a sacrifice of 100 Fire Trucks. The opportunity cost of producing an additional 100 Dolls is 100 Fire Trucks.
2: Without additional information, it is impossible to determine the opportunity cost of an additional doll.
The table does not provide specific data to calculate the opportunity cost of an additional doll accurately. Without knowing the precise trade-off between Dolls and Fire Trucks at each production level, we cannot determine the opportunity cost with the given information.
4: Mutual gains from trade can be obtained if the United States imports televisions from Korea and Korea imports wheat from the United States.
The comparative advantage lies with Korea in television production as it has a lower domestic opportunity cost (10 bushels of wheat) compared to the United States (20 bushels of wheat). The United States has a comparative advantage in wheat production. Therefore, by engaging in trade where the United States imports televisions from Korea and Korea imports wheat from the United States, both countries can benefit from mutual gains in terms of efficiency and increased output.
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Qd=22,750−0.01PH. This is our current demand equation. Suppose income changes from $60,000 to $72,000. What is the income elasticity of demand for housing when the price is $210,000? Click the icon to view the derivation of the current demand equation. The income elasticity of demand for housing when the price is $210,000 and income changes from $60,000 to $72,000 is EN=□. This is Housing is good. (Round to two decimal places as needed.)
To calculate the income elasticity of demand for housing, we need to use the following formula: EN = (∆Qd / Qd) / (∆Income / Income)
Given that the current demand equation is Qd = 22,750 - 0.01PH and the income changes from $60,000 to $72,000, we can calculate the change in demand (∆Qd) and the change in income (∆Income). ∆Qd = Qd2 - Qd1 = (22,750 - 0.01PH) - (22,750 - 0.01PH) = -0.01PH - (-0.01PH) = 0 ∆Income = Income2 - Income = $72,000 - $60,000 = $12,000 Now, let's calculate the income elasticity of demand when the price is $210,000: EN = (∆Qd / Qd) / (∆Income / Income) = (0 / Qd) / ($12,000 / $60,000) = 0 / (1/5) = 0 Therefore, the income elasticity of demand for housing when the price is $210,000 and income changes from $60,000 to $72,000 is 0. This means that housing is an income inelastic good, indicating that changes in income have little effect on the demand for housing.
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What Are The Impacts Of The Labor Shortage On The Recruiting And Selection Function Of HR? Explain?
The impacts of labor shortage on the recruiting and selection function of HR are significant. In 3 lines, the main answer is that it makes it harder to find qualified candidates, increases competition among employers, and can lead to longer hiring processes.
In the explanation, labor shortage refers to a situation where there is a scarcity of available workers in the job market. This shortage can have several effects on the recruiting and selection function of HR. Firstly, it becomes more difficult to find qualified candidates for open positions. With fewer people actively seeking employment, HR departments may struggle to attract individuals with the desired skills and qualifications. This can lead to extended job vacancies and increased workload for existing employees.
Secondly, the labor shortage creates more competition among employers. Organizations may have to offer higher salaries, better benefits, or additional perks to entice candidates to choose their company over competitors. This can increase the cost of hiring and may strain the HR department's budget. Lastly, the hiring process itself may become longer and more complex. With fewer candidates available, HR departments may need to spend more time and resources sourcing and screening potential hires. This can result in a slower hiring process, which can be frustrating for both HR professionals and hiring managers.
To summarize, the labor shortage has significant impacts on the recruiting and selection function of HR. It makes it harder to find qualified candidates, increases competition among employers, and can lead to longer hiring processes.
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For a firm in a perfectly competitive market equilibrium:
Select one:
a.
MC < AC.
b.
MC must be rising.
c.
MC must be falling.
d.
MC < AVC.
For a firm in a perfectly competitive market equilibrium:
b. MC must be rising.
In a perfectly competitive market equilibrium, the firm produces at the level where marginal cost (MC) equals marginal revenue (MR) and both are equal to the market price. At this point, the firm maximizes its profits.
Since marginal cost represents the additional cost incurred for producing one more unit of output, it is expected that as the firm increases its production beyond the equilibrium point, the marginal cost will rise. This is because the firm may need to employ additional resources or experience diminishing returns, leading to higher costs per unit.
Therefore, the statement that MC must be rising in a perfectly competitive market equilibrium is correct.
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Radison Inc, sells a product for $63 per unit. The variable cost is $29 per unit, while fixed costs are $397,664. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $72 per unit. a. Break-even point in sales units b. Break-even point if the selling price were increased to $72 per unit units units
The break-even point if the selling price were increased to $72 per unit is approximately 9,236 units.
To calculate the break-even point in sales units, you can use the following formula: Break-even point (in units) = Fixed costs / Contribution margin per unit. First, let's calculate the contribution margin per unit: Contribution margin per unit = Selling price per unit - Variable cost per unit= $63 - $29= $34. (a) Break-even point in sales units: Break-even point (in units) = $397,664 / $34≈ 11,699.53 units. Therefore, the break-even point in sales units is approximately 11,700 units. To calculate the new break-even point if the selling price were increased to $72 per unit, we need to recalculate the contribution margin per unit: New contribution margin per unit = New selling price per unit - Variable cost per unit= $72 - $29= $43. (b) Break-even point if the selling price were increased to $72 per unit: Break-even point (in units) = $397,664 / $43≈ 9,235.44 units.
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Calculate the total 2021 New Jersey tax liability for Jill and Bill, also include their federal income tax payment. Post the amount for each tax, and the total liability in the classroom.
Jill earned $80,000
Bill earned $77,000
NJ SDI 0.47%
NJ SUI 0.38%
NJ WFD 0.04%
NJFLI 0.28%
INCOME TAX 1.50%
The total 2021 New Jersey tax liability for Jill is $2,136 and for Bill is $2,055.90.
To calculate the total 2021 New Jersey tax liability for Jill and Bill, we need to consider their incomes and the applicable tax rates.
Jill earned $80,000, and Bill earned $77,000.
First, let's calculate their New Jersey State Disability Insurance (NJ SDI) tax:
Jill's NJ SDI tax = $80,000 * 0.47% = $376
Bill's NJ SDI tax = $77,000 * 0.47% = $361.90
Next, let's calculate their New Jersey State Unemployment Insurance (NJ SUI) tax:
Jill's NJ SUI tax = $80,000 * 0.38% = $304
Bill's NJ SUI tax = $77,000 * 0.38% = $292.60
Now, let's calculate their New Jersey Workforce Development (NJ WFD) tax:
Jill's NJ WFD tax = $80,000 * 0.04% = $32
Bill's NJ WFD tax = $77,000 * 0.04% = $30.80
Moving on to the New Jersey Family Leave Insurance (NJFLI) tax:
Jill's NJFLI tax = $80,000 * 0.28% = $224
Bill's NJFLI tax = $77,000 * 0.28% = $215.60
Lastly, let's calculate their New Jersey Income Tax:
Jill's income tax = $80,000 * 1.50% = $1,200
Bill's income tax = $77,000 * 1.50% = $1,155
Now, let's find the total tax liability for Jill:
Total tax liability for Jill = NJ SDI tax + NJ SUI tax + NJ WFD tax + NJFLI tax + income tax
Total tax liability for Jill = $376 + $304 + $32 + $224 + $1,200 = $2,136
And the total tax liability for Bill:
Total tax liability for Bill = NJ SDI tax + NJ SUI tax + NJ WFD tax + NJFLI tax + income tax
Total tax liability for Bill = $361.90 + $292.60 + $30.80 + $215.60 + $1,155 = $2,055.90
Therefore, the total 2021 New Jersey tax liability for Jill is $2,136 and for Bill is $2,055.90.
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