Answer:
The contract A yields a loss under ABC but Contract B yields a profit.
ABC Profit contract A $ (3000) contract B $ 11250
Under absorption costing both contract yield profits.
Absorption Profit contract A $ 3250 contract B $7500
Management should make decisions using ABC and reject Contract A and accept Contract B.
Explanation:
Customer AAA BBB
Component Type A999 B999
Contract Value ($) $27,000 $100,000
Contract Quantity 1,000 unit 2,000 unit
Material cost/unit $15 $20
Molding time/batch 5 hours 7.5 hours
Batch size 100 units 50 units
Activity Based Rate= Cost per Unit of Cost Driver
Activity Cost driver Cost Rate
Molding 2,000 $150,000 $150,000 / 2,000 = 75
Inspection 150 $75,000 $75,000/150 = 500
Production 20 $125,000 $125,000/20= 6250
Total $ 350,000
Cost Drivers Consumed
Activity A999 B999
Molding time/batch 5 hours* 10 7.5 hours *40
50 300
Batch size 1,000 unit/ 100 units 2,000 unit/50 units
= 10 =40
ABC Profits for Each Contract
A999 B999
Selling Price $27,000 $100,000
Materials 15*1000 20 * 2000
= 15000 = 40,000
Molding 50 hours *75 300* 75
3750 22500
Inspection 10 batches *500 40 batches *500
$ 5000 $ 20000
Management Contracts $ 6250 $ 6250
Total $ 30,000 $ 88,750
Profit $ (3000) $ 11250
Overhead Rate Absorption Costing
Total Overheads= ( 150,000 + 125,000+ 75000) = $ 350000
Annual Molding Hours = 2000
Rate= $ 350,000/2000=$ 175 per molding hour
Absorption Costing
Profit For each Contract
A999 B999
Selling Price $27,000 $100,000
Materials 15*1000 20 * 2000
= 15000 = 40,000
Overheads 50 hours *175 300 Hours *175
= 8750 = 52,500
Total Cost 23750 92500
Profit 3250 7500
The contract A yields a loss under ABC but Contract B yields a profit.
Under absorption costing both contract yield profits.
Management should make decisions using ABC and reject Contract A and accept Contract B.
O'Mally Department Stores is considering two possible expansion plans. One proposal involves opening 5 stores in Indiana at the cost of $1,810,000. Under the other proposal, the company would focus on Kentucky and open 6 stores at a cost of $2,000,000. The following information is available: Indiana proposal Kentucky proposal Required investment $1,810,000 $2,000,000 Estimated life 6 years 6 years Estimated residual value $80,000 $40,000 Estimated annual cash inflows over the next 10 years $700,000 $800,000 Required rate of return 13% 13% The accounting rate of return for the Indiana proposal is closest to (Round any intermediary calculations to the nearest dollar, and round your final answer to the nearest hundredth of a percent, X.XX%.)
Answer:
O'Mally Department Stores
The accounting rate of return for the Indiana proposal is closest to 24.28%
Explanation:
a) Data and Calculations:
Indiana proposal Kentucky proposal
Required investment $1,810,000 $2,000,000
Estimated life 6 years 6 years
Estimated residual value $80,000 $40,000
Estimated depreciable cost $1,730,000 $1,960,000
Average depreciable cost $288,333 $326,667
Estimated annual cash inflows
over the next 10 years $700,000 $800,000
Average cash inflows $70,000 $80,000
Required rate of return 13% 13%
Accounting rate of return = Average cash inflows/Average depreciable cost x 100 = $70,000/$288,333 x 100 = 24.28%
The Indiana proposal of O'Mally Department Stores' accounting rate of return is the ratio of estimated accounting profit to the average investment cost. The estimated accounting profit is equivalent to the average cash inflow and the average investment cost is equivalent to the average depreciable cost.
Assuming you are a rational investor, the amount you should be willing to pay for a 20-year ordinary annuity that makes payments of $4,000 per year and you require a 6% rate of return per year is closest to:
Answer:
PV= $45,879.68
Explanation:
Giving the following information:
Cash flow= $4,000 annually
n= 20
i= 6% compunded annually
The maximum that an investor should pay is the present value (PV).
First, we need to calculate the future value using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual cash flow
FV= {4,000*[(1.06^20) - 1]} / 0.06
FV= $147,142.36
Now, we can calculate the present value, we need to use the following formula:
PV= FV/(1+i)^n
PV= 147,142.36/(1.06^20)
PV= $45,879.68
In the basic EOQ model, an annual demand of 40 units, an ordering cost of $5, and a holding cost of $1 per unit per year will result in an EOQ of:
Answer:
20
Explanation:
The formula for Economic order quantity ( EOQ ) = √2DS/H,
Where,
D annual demand = 40 units
S Ordering cost = $5
H Holding cost = $1
Hence ,
EOQ = √ 2 × 40 units × $5 / 1$
= √ $400 / $1
= 20
Sheffield Corporation purchased machinery on January 1, 2017, at a cost of $250,000. The estimated useful life of the machinery is 4 years, with an estimated salvage value at the end of that period of $24,000. The company is considering different depreciation methods that could be used for financial reporting purposes.Required:Prepare separate depreciation schedules for the machinery using the straight-line method, and the declining-balance method using double the straight-line rate.
Answer and Explanation:
(A) Depreciation Schedules Under Straight line method
Depreciation rate under straight line method = 1 ÷ Useful life of asset
= 1 ÷ 4
=25%
Depreciable cost = Cost of the Asset - Salvage value
= $250,000 - $24000
= $226,000
Year Depreciable Depreciation Annual Accumulated Book
cost rate Depreciation Depreciation Value
Expense
2017 $226,000 25% $565,00 56,500 $193,500
($250,000 - $56,500)
2018 $226,000 25% $565,00 $113,000 $137,000
($193,500 - $56,500)
2019 $226,000 25% $565,00 $169,500 $80,500
($137,000 - $56,500)
2020 $226,000 25% $565,00 $226,000 $24,000
($80,500 - $56,500)
For computing the annual depreciation we simply multiply the depreciable cost with depreciation rate.
(B) Depreciation Schedules Under Double declining balance method
Depreciation rate under Double declining Balance method
= 2 × Straight line method
= 2 × 25%
= 50%
Year Book value Depreciation Annual Accumulated Book
beginning rate Depreciation Depreciation Value
of the year Expense
2017 $250,000 50% $125,000 $125,000 $125,000 2018 $125,000 50% $62,500 $187,500 $62,500 2019 $62,500 50% $31,250 $218,750 $31,250
2020 $31,250 $7,250 $226,000 $24,000
For computing the annual depreciation expenses we simply multiply the book value beginning of the year with depreciation rate.
2020 Depreciation balance
= Book Value beginning 2020 - Salvage value
= $31,250 - $24,000
= $7,250
9) Selected information regarding a company's most recent quarter follows (all data in thousands). 9) _______ Direct labor $540 Beginning work in process inventory $330 Ending work in process inventory $420 Cost of goods manufactured $1620 Manufacturing overhead $830 What was the cost of direct materials used for the quarter
Answer:
Direct material= $340
Explanation:
Giving the following information:
Direct labor $540
Beginning work in process inventory $330
Ending work in process inventory $420
Cost of goods manufactured $1620
Manufacturing overhead $830
To calculate the direct material used in production, we need to use the following formula:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
1,620= 330 + DM + 540 + 830 - 420
Direct material= $340
Kennywood Inc., a manufacturing firm, is able to produce 1,500 pairs of pants per hour, at maximum efficiency. There are three eight−hour shifts each day. Due to unavoidable operating interruptions, production averages 850 units per hour. The plant actually operates only 28 days per month. Based on the current budget, Kennywood estimates that it will be able to sell only 504,000 units due to the entry of a competitor with aggressive marketing capabilities. But the demand is unlikely to be affected in future and will be around 516,000. Assume the month has 30 days. What is the theoretical capacity for the month?
Answer:
1,080,000 units
Explanation:
Given the below information;
Theoretical capacity per hour = 1,500 units per hour
Hours per shift = 8 hours
Number of shift in each day = 3
Number of days per month = 30
Theoretical capacity for the month
= Theoretical capacity per hour × number of shift per day × hours per shift/day × number of days in a month
= 1,500 × 3 × 8 × 30
= 1,080,000 units
Emira wants to buy a classic drawing from an art centre in Kuala Lumpur. She managed to secure a painting by a renowned Malaysian artist that costs her RM99,800. Currently, she only has RM12,650 in her savings account and she intends to use 70% of her saving to fund the purchase. If she borrows the remaining amount from Bank Atlantis that levies 4.77% of interest rates, determine the total interest payment that she will pay if the agreement takes 10 years of settlement.
Answer:
RM23,617.80
Explanation:
cost of the painting RM99,800
she has RM12,650 on her bank account and she will use 70% = RM8,855 as down payment. She will borrow the rest = RM99,800 - RM8,855 = RM90,945
interest charged on the loan 4.77% / 12 = 0.3975%
120 monthly periods (10 years)
using the present value formula to determine the monthly payment:
PV = monthly payment x annuity factor
monthly payment = PV / annuity factor
PV = 90,945
annuity factor (120 periods, 0.3975%) = 95.26168
monthly payment = 90,945 / 95.26168 = 954.69
total payments = 120 x 954.69 = RM114,562.80
interests paid = RM114,562.80 - RM90,945 = RM23,617.80
In a transaction for a good valued at $550 by a buyer and $500 by a seller, what percentage sales tax (assume tax on $500) would result in an unconsummated transaction
Answer:
A percentage sales tax that is more than 10% will result in an unconsummated transaction, because the buyer is not willing to pay more than $550 for the good.
Explanation:
A sales tax of 10% will make the good to cost $550 ($500 x 1.1). This is the maximum value placed on the good by the buyer. If the rate of the sales tax exceeds this rate, the buyer will likely not buy the good unless it is an essential good that she cannot do without. So, in levying sales taxes, it is important to understand the demand elasticity of the good. A good whose demand is inelastic is more likely to favor high sales tax rates than a similar good with elastic demand. This elasticity of demand tries to explain the response that demand will generate based on an increase or a decrease in price of a good.
Lakeland Consulting started the year with total assets of $30,000 and total owner's equity of $20,000. During the year a) assets increased by $20,000, b) the business recorded $45,000 in revenues, c) the business recorded $30,000 in expenses, and d) the owner withdrew $5,000 for personal use. Liabilities at the end of the year were:
Answer:
Liabilities at the end of the year were: $15,000.
Explanation:
Using the Accounting Equation : Assets = Equity + Liability
Then we know that,
Liability = Assets - Equity
Opening Balance of Liabilities ( $30,000 - $20,000) = $10,000
Adjustment during the year ($20,000 - ($45,000 - $30,000)) = $5,000
Ending Balance of Liability = $15,000
For a certain item, the cost-minimizing order quantity obtained with the basic EOQ model is 200 units, and the total annual inventory (carrying and setup) cost is $400. What is the inventory carrying cost per unit per year for this item? $2.00 $3.00 $150.00 $1.00 not enough data to determine
Answer:
$2 per unit per year
Explanation:
The computation of the inventory carrying cost per unit per year is shown below:
Inventory Carrying cost per unit per year is
= Total Annual Inventory cost ÷ Economic order quantity
= $400 ÷ 200 units
= $2 per unit per year
By dividing the total annual inventory cost from the economic order quantity, the inventory carrying cost could come and the same is to be applied
Hence, the first option is correct
If the government wants to minimize the deadweight loss of taxation, which of the following items are good candidates for an excise tax? (select all that apply)A. emergency plumber servicesB. Coca-ColaC. insulinD. food at restaurants
Answer:
A. emergency plumber services and C.insulin.
Explanation:
From the list provided the best candidates for this would be emergency plumber services and insulin. That is because these are items or services that have a high supply but low demand due to the population of customers being a minority. This, therefore, causes market inefficiency which leads to deadweight loss. Other items like Coca-Cola and food mostly stay in equilibrium because products are made depending on the current demand and the customer population is the vast majority.
Which of the following is not a global economic forum of nations?
G-8
O G650
+ 5
G-20
Answer:
c
Explanation:
answer is c
Which of the following approaches should the Fed use if it experiences large lags and mistakes in monetary policy?
a. Discretionary policy
b. An eclectic approach
c. Fixed rules
d. Fiscal policy
Answer:
C. Fixed rules.
Explanation:
This is simply a policy that is seen to be a monetary or in some cases fiscal; they are said to be automated in most of its cases and are based on the criteria that are predetermined.
In most cases, these policies are seen to be binding and also categorically constrain officials' policy choices based on certain predetermined criteria to direct them toward serving the public interest.
Many cases by policymakers made this policy to be put in place because most of them generally cannot bind their own future choices, also fixed policy rules usually have to be enforced by some kind of higher authority in order to be binding etc.
An asset has had an arithmetic return of 11.9 percent and a geometric return of 9.9 percent over the last 86 years. What return would you estimate for this asset over the next 8 years? 23 years? 39 years? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
11.74% ; 11.38%; 11.01%
Explanation:
Given the following :
Arithmetic return (Ar) = 11.9%
Geometric return (Gr) = 9.9%
N = 86 years = Past period
A) Return in the next 8 years
T = future period = 8 years
Return = (T - 1) / (N - 1) * Geometric average + (N - T) / (N - 1) * Arithmetic average.
Return = (8 - 1) / (86 - 1) * 0.099 + (86 - 8) / (86 - 1) * 0.119
(0.0823529 * 0.099) + (0.9176470 * 0.119)
= 0.1173529301
= 0.1173529301 * 100 = 11.74%
B) over the next 23 years
T = 23 years
Return = (T - 1) / (N - 1) * Geometric average + (N - T) / (N - 1) * Arithmetic average.
Return = (23 - 1) / (86 - 1) * 0.099 + (86 - 23) / (86 - 1) * 0.119
(0.2588235 * 0.099) + (0.7411764 * 0.119)
= 0.1138235181
= 0.1138235181 * 100 = 11.38%
C.) over 39 years
F = 39 years
Return = (T - 1) / (N - 1) * Geometric average + (N - T) / (N - 1) * Arithmetic average.
Return = (39 - 1) / (86 - 1) * 0.099 + (86 - 39) / (86 - 1) * 0.119
(0.4470588 * 0.099) + (0.5529411 * 0.119)
= 0.1100588121
= 0.1100588121 * 100 = 11.01%
The profit-maximizing monopolist produces _____________ units and charges a price of _____________.
Answer: Q0; P3
Explanation:
The profit-maximizing monopolist produces Q0 units and charges a price of P3.
According to the exhibit graph, the monopolist will produce Q0 units. This is because a monopoly maximises profit at the point where Marginal Revenue equals Marginal Cost. Looking at the chart, the quantity of output where this happens is Q0.
The Monopolist will then charge a price of P3. After the profit-maximising output is realized, the way to find out the price the monopolist will sell at is the point where the output produced intersects with the Demand curve. At this point, the price listed is what people are willing to buy that amount of quantity for and so the Monopoly will sell at that price.
Fowler, Inc., just paid a dividend of $2.70 per share on its stock. The dividends are expected to grow at a constant rate of 4.5 percent per year, indefinitely. Assume investors require a return of 9 percent on this stock. a. What is the current price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What will the price be in six years and in thirteen years? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Answer:
Fowler, Inc.a. Current price = Current Dividend/r - g
where r = Required Rate of Return
and g = growth rate
= $2.70/0.09 - 0.045
= $2.70/0.045
= $60
b. The price in six years' time, growing at 4.5%
= Current price x (1 + g)^6
= $60 x 1.30226
= $78.14
c. The price in thirteen years' time, growing at 4.5%
= $60 x 1.772196
= $106.33
Explanation:
a) Data and Calculations:
Current Dividend = $2.70
Dividends' constant growth rate = 4.5% p.a. indefinitely
Investors' required rate of return = 9%
Fowler, Inc.'s stock prices calculated using the dividend, growth rate, and investors required rate of return gives the intrinsic values of the stock for the current year, in six and thirteen years' time. The intrinsic value calculation eliminates the need to value the stock subjectively.
Cobe Company has already manufactured 17,000 units of Product A at a cost of $20 per unit. The 17,000 units can be sold at this stage for $410,000. Alternatively, the units can be further processed at a $240,000 total additional cost and be converted into 5, 800 units of Product B and 11, 400 units of Product C. Per unit selling price for Product B is $107 and for Product C is $52.
Prepare an analysis that shows whether the 17,000 units of Product A should be processed further or not.
Sell as is ProcessFurther
Sales
Relevant costs:
Total relevant costs
Income (loss)
Incremental net income (or loss) if processed further
The company should
Answer:
differential analysis:
No further process Process further Differential
amount
Sales revenue $410,000 $1,213,400 $803,400
Production costs ($340,000) ($580,000) ($240,000)
Operating income $70,000 $633,400 $563,400
The company should process further and sell products B and C because its operating income will increase by $563,400.
What type of policy lowers interest rates to allow individuals access to more money for large purchases
Complete Question:
What type of policy lowers interest rates to allow individuals access to more money for large purchases?
Group of answer choices
A. Fiscal.
B. Stimulus.
C. Discount.
D. Monetary.
Answer:
D. Monetary.
Explanation:
Monetary policy can be defined as the actions (macroeconomic policies) adopted and undertaken by the central bank of a particular country to control the money supply and interest rates so as to boost or enhance economic growth. The central bank uses monetary policies to manage inflation, economic growth through long-term interest rates and level of unemployment in a country. In order to boost economic growth, monetary policy is used to increase money supply (liquidity) while it is also used to prevent inflation by reducing money supply.
Generally, money supply comprises of checks, cash, money market mutual funds (MMF) and credit (mortgage, bonds and loans).
Additionally, monetary policy lowers interest rates to allow individuals access to more money for large purchases.
Jenny Corp. needs to raise $53 million to fund a new project. The company will sell shares at a price of $29.00 in a general cash offer and the company's underwriters will charge a spread of 7.5 percent. The direct flotation costs associated with the issue are $925,000. How many shares need to be sold?
Answer:
2,010,252 Shares
Explanation:
The funds that are to be raised = $53,000,000
Spread = 7.5%
Share price = $29.00
Flotation cost with issue = 925,000
We have that:
(53000000+925000)/92.5 * 100
(539,250,000/92.5)x100
= $58297.973 x 100
= $58297297.3
The offer per share is placed at $29.00
So to get the number of shares sold:
$58297297.3 / $29.00
= 2,010,252 shares are to be sold.
Following are the accounts and balances from the adjusted trial balance of stark company
Notes payable $11,000 Accumulated depreciation building $15,000
Prepaid insurance 2,500 Accounts receivable 4,000
Interest expense 500 Utilities expense 1,300
Accounts payable 1,500 Interest payable 100
Wages payable 400 Unearned revenue 800
Cash 10,000 Supplies expense 200
Wages expense 7,500 Buildings 40,000
Insurance expense 1,800 Dividends 3,000
Common stock 10,000 Depreciation expense—Buildings 2,000
Retained earnings 14,800 Supplies 800
Services revenue 20,000
Prepare the (1) income statement and (2) statement of retained earnings for the year ended December 31 and (3) balance sheet at December 31. The Retained Earnings account balance was $35,600 on December 31 of the prior year.
Answer:
STARK COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31
PARTICULARS AMOUNT $
Service Revenue 20,000
Expenses
Supplies expense 200
Interest expense 500
Insurance expense 1,800
Utilities expense 1,300
Depreciation expense 2,000
Wages expense 7,500
Total expenses 13,300
Net profit 6,700
STARK COMPANY
STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31
Amount $
Retained earnings December 31 prior year end 14,800
Add- Net income 6,700
Less- Dividends 3,000 3,700
Retained earnings, December 31 Current year end 18,500
3. STARK COMPANY
BALANCE SHEET FOR THE YEAR ENDED DECEMBER 31
Current Assets
Cash 10,000
Accounts receivable 4,000
Office supplies 800
Prepaid insurance 2,500
Total current asset 17,300
Non Current Assets
Buildings 40,000
Less- Accumulated dep. 15,000
Total Non Current Assets 25,000
Total Assets 42,300
Liabilities
Current liabilities
Accounts payable 1,500
Interest payable 100
Notes payable 11,000
Unearned revenue 800
Wages payable 400
Total Current liabilities 13,800
Long term liabilities
Common stock 10,000
Retained earnings 18,500 28,500
Total liabilities and capital 42,300
Financial statements are statements that keep a record of the various transactions of the firm. It keeps the records of the inflow and outflow of cash in the company and also maintains the sound wealth in the firm.
The income statement, balance sheet, and calculations have been attached below.
To know more about the financial statements, refer to the link below:
https://brainly.com/question/25631040
You want to make a one-time deposit today that will increase in value to $100 at the end of this year. Which rate of interest will allow you to deposit the least amount today to reach this goal
Answer:
The rate of interest is 11.111%
The Deposit should be $90 today.
The future value at the end of this year will be $100.
Explanation:
Future value of $100
Present value of $100 at 11.111% = $100/11.111 = $90
The future value of a deposit today is the value after a period of one year or so periods. The rate of interest produces the discount factor that can calculate the present value of $100. To make a one-time deposit of $90 today will increase in value to $100 using an interest rate of 11.111%.
Bond X is a premium bond making semiannual payments. The bond pays a coupon rate of 9 percent, has a YTM of 7 percent, and has 15 years to maturity. Bond Y is a discount bond making semiannual payments. This bond pays a coupon rate of 7 percent, has a YTM of 9 percent, and also has 15 years to maturity. The bonds have a $1,000 par value. What is the price of each bond today
Answer:
Bond Price today
Bond X = $1183.920454 rounded off to $1183.92
Bond Y = $837.1111146 rounded off to $837.11
Explanation:
To calculate the price of the bond, we need to first calculate the coupon payment per period. We assume that the interest rate provided is stated in annual terms. As the bond is a semi annual bond, the coupon payment, number of periods and semi annual YTM will be,
For Bond X
Coupon Payment (C) = 0.09 * 1/2 * 1000 = $45
Total periods (n)= 15 * 2 = 30
r or YTM = 7% * 1/2 = 3.5% or 0.035
The formula to calculate the price of the bonds today is attached.
Bond Price = 45 * [( 1 - (1+0.035)^-30) / 0.035] + 1000 / (1+0.035)^30
Bond Price = $1183.920454 rounded off to $1183.92
For Bond Y
Coupon Payment (C) = 0.07 * 1/2 * 1000 = $35
Total periods (n)= 15 * 2 = 30
r or YTM = 9% * 1/2 = 4.5% or 0.045
Bond Price = 35 * [( 1 - (1+0.045)^-30) / 0.045] + 1000 / (1+0.045)^30
Bond Price = $837.1111146 rounded off to $837.11
Using the percentageofsales method, the estimated total uncollectible accounts are . The Allowance for Uncollectible Accounts prior to adjustment has a debit balance of . The Accounts Receivable balance is . The amount of the adjusting entry for UncollectibleAccounts Expense is:
Answer:
the main part of ur question hasbeen left out so no one could help but i got a answer anyways
Explanation:
it's b
$7,322 + $2,635
= $9,957
If a company reorganizes its operation to gain efficiency, the cost associated with this reorganization is classified as
Answer: Restructuring cost
Explanation:
Restructuring cost could be described as making expenses on rejuvenating or reviving or rebranding the company through spendings, which affects most of it's mode of operations, brings a change and innovation and ways to improve existing methods. This is capital intensive due to the work and changes required during the process.
What is the equivalent annual annuity of a project that requires an investment of $50,000 today and is expected to generate free cash flows of $15,000 per year for the next five years? The company’s weighted average cost of capital is 13.1% per year.
Answer:
$749.57
Explanation:
equivalent annual annuity = (NPV x rate) / [1 - (1 + rate)⁻ⁿ]
using a calculator, the NPV = $2,630rate = 13.1%n = 5equivalent annual annuity = ($2,630 x 0.131) / [1 - (1 + 0.131)⁻⁵] = $344.53 / 0.4596 = $749.57
The equivalent annual annuity is used to compare mutually exclusive projects and determine which yields the highest annual returns.
If the Board of Governors of the Federal Reserve increases the reserve requirement then the money supply will decline. True False
Answer:
i think the answer is true please let me know if it is incorrect
Explanation:
On January 1, Year 1, St. Clair Corporation issues 7%, 11-year bonds with a face amount of $90,000 for $83,497. The market interest rate is 8%. Interest is paid semiannually on June 30 and December 31. Complete the necessary journal entry for the issuance of the bonds by selecting the account names from the drop-down menus and entering the associated dollar amounts.
Answer:
Cash $83,497 (debit)
Investment in Bonds $83,497 (credit)
Explanation:
On Issuance of Bond, the Bond Issuer must recognize the Assets of Cash at the amount of consideration paid by the Bond Holder (Investor).
Also, the Financial Liability : Investment in Bonds must also be recognized by the Issuer at the same amount that the cash has been recognized at.
The price of a stock at the end of each of the past three years has been $14, $12, and $11 with $11 being the latest price. The stock pays an annual dividend of $1 per share. What is the average annual capital gain for the past two years
Answer: 11.31%
Explanation:
From the question, we are informed that the price of a stock at the end of each of the past three years has been $14, $12, and $11 with $11 being the latest price and that the stock pays an annual dividend of $1 per share.
The average annual capital gain for the past two years will be:
= (-$2/$14) + ($-1/$12)/2
= 11.31%
Firm J has net income of $77,605, sales of $935,000, and average total assets of $467,500. Required: Calculate Firm J’s margin, turnover, and return on investment (ROI).
Answer:
Firm J's margin= 8.3%
Firm J's turnover= 2
Firm J's ROI= 16.6%
Explanation:
Form J has a net income of $77,605
The sales is $935,000
The average total assets is $467,500
Firm J's margin can be calculated as follows
Margin= Net income/sales
= $77,605/$935,000
= 0.083×100
= 8.3%
Firm J's turnover can be calculated as follows
Turnover= Sales/Average Total assets
= $935,000/$467,500
= 2
Firm J's return on investment can be calculated as follows
ROI= Net income/Average Total assets
= $77,605/$467,500
= 0.166×100
= 16.6%
Hence Firm J's margin, turnover and return on investment is 8.3%, 2 and 16.6% respectively.
As the athletic shoe buyer for Sports Authority, how would you go about forecasting sales for a new Nike running shoe?
Answer:
The answer is below
Explanation:
I would go about forecasting sales for a new Nike running shoe in the following ways:
1. Check past sales history: Examining Nike's sales history to check and differentiate which items have high sales well and those items that didn’t. This will help anticipate and forecast sales for the new Nike running shoe by putting it side by side with a similar product.
2. Conduct detailed market research: This is vital to predicting prospective sales in order to determine if the shoes will sell satisfactorily.
Making research to infer specifically the products, consumers wants will give Nike a current idea of what is in vogue. Thus, by conducting detailed research and discovering what their consumers prefer and disfavor, they will have the ability to predict sales for a new item.
