Debit and credit are terms used in accounting to record and track financial transactions.
Debit represents an increase in assets and expenses or a decrease in liabilities and equity. It is recorded on the left side of an account.
Credit represents a decrease in assets and expenses or an increase in liabilities and equity. It is recorded on the right side of an account.
To determine the balance in an account, you need to add up all the debits and credits. If the total debits are greater than the total credits, the account will have a debit balance. If the total credits are greater, the account will have a credit balance.
The debit-credit rule states that for every transaction, the total debits must equal the total credits. This rule ensures that the accounting equation (assets = liabilities + equity) remains balanced.
The term "normal balance" refers to the side of the account where increases are recorded. For assets, expenses, and dividends, the normal balance is on the debit side. For liabilities, equity, and revenues, the normal balance is on the credit side.
The subdivisions of stockholders' equity include common stock, preferred stock, additional paid-in capital, retained earnings, and accumulated other comprehensive income. Each subdivision affects the balance of stockholders' equity differently. Common stock and preferred stock represent the initial investments made by shareholders, while additional paid-in capital reflects additional contributions made by shareholders. Retained earnings account accumulates the net income or loss of a company over time. Its normal balance is on the credit side.
The purpose of earning revenue for a company is to generate income from its business activities. Revenue is recorded as a credit because it increases the company's equity. It represents the value created by the company's operations.
Recording expenses in an account is done with a debit because expenses decrease the company's equity. This is the opposite of stockholders' equity because expenses represent costs incurred by the company in generating revenue.
The subdivisions of stockholders' equity are reported in the equity section of the balance sheet. Common stock, preferred stock, additional paid-in capital, and retained earnings are typically reported in this section.
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4. The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed on January 1, 2020. In addition, E&B Comic Bookstore Company’s charter will authorize 1,200,000 shares of common stock (to be divided into two classes (700,000 shares class A -voting rights and 500,000 shares class B -nonvoting rights) and 400,000, $X par value (see info below), 5% cumulative preferred stock. B. Prepare the company’s Stockholders equity section of the balance sheet at December 31, 2020. (Hint!!!!!!!) The following information must be clearly stated/shown: • information on par or par values for all classes of shares which must be shown separately. ACCT1002 Introduction to Financial Accounting 6 • the number of shares authorized and issued where necessary. • the sub total for the total paid in capital.
As of December 31, 2020, E&B Comic Bookstore Company's stockholders equity section of the balance sheet includes 700,000 Class A shares with voting rights and 500,000 Class B shares with no voting rights authorized and issued. The par value for both classes of stock is $1 per share.
In addition, [tex]400,000[/tex] shares of $X par value, cumulative 5% preferred stock are authorized but not yet issued. financial transactions of The total paid-in capital for both classes of common stock equals $[tex]1,200,000.[/tex]Therefore, the stockholders' equity section of the balance sheet is as follows: Common stock:
Class A, 700,000 shares authorized, issued and outstanding, $[tex]700,000[/tex] par value Class B, 500,000 shares authorized, issued and outstanding, $[tex]500,000[/tex] par value Total common stock, $1,200,000 par value Preferred stock: 400,000 shares authorized and unissued, $X par value, 5% cumulative Total preferred stock, $X authorized Total paid-in capital: $1,200,000
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Ivanhoe Curtin borrowed $31,300 on July 1, 2022. This amount plus accrued interest at 9% compounded annually is to be repaid on July 1, 2027. Click here to view the factor table. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) How much will Ivanhoe have to repay on July 1, 2027? (Round answer to 2 decimal places, e.g. 25.25.) Amount to be repaid on July 1, 2027 $
Ivanhoe Curtin will have to repay approximately $48,400.77 on July 1, 2027.
To calculate the amount that Ivanhoe Curtin will have to repay on July 1, 2027, we need to determine the future value of the loan amount plus the accrued interest. We can use the compound interest formula to calculate this.
The compound interest formula is given by:
Future Value = Principal * (1 + interest rate)^n
Where:
Principal = Initial loan amount = $31,300
Interest rate = Annual interest rate = 9% = 0.09
n = Number of compounding periods = 5 years (from July 1, 2022, to July 1, 2027)
Substituting the values into the formula, we get:
Future Value = $31,300 * (1 + 0.09)^5
Using the factor table provided, we can find the value of (1 + 0.09)^5, which is approximately 1.54787.
Future Value = $31,300 * 1.54787
Calculating this, we find:
Future Value ≈ $48,400.77
Ivanhoe Curtin will have to repay approximately $48,400.77 on July 1, 2027.
Please note that the answer is rounded to 2 decimal places as requested.
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Assume you are to invest $50 at the end of each year for 20 years into an account that grows 10% annually. What will be the value of your account at the end of Year 20 ? \begin{tabular}{|} $336.38 \\ $1,100.00 \\ $1,297.93 \\ $2.863.75 \\ $3,150.12 \end{tabular}
The value of the account at the end of Year 20 will be $3,363.75, which is closest to option E: $3,150.12.
We can use the formula for the future value of an annuity to determine the value of the account at the end of Year 20:
FV = PMT x ((1 + r)^n - 1) / r
where FV is the future value, PMT is the regular payment amount, r is the annual interest rate, and n is the number of periods.
Plugging in the values, we get:
FV = $50 x ((1 + 0.10)^20 - 1) / 0.10
FV = $50 x (6.7275) / 0.10
FV = $3,363.75
Therefore, the value of the account at the end of Year 20 will be $3,363.75, which is closest to option E: $3,150.12.
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Question 4 – Leadership You have just returned from a conference on leadership held in the lovely Southside of Chicago. You heard from a diverse range of interesting speakers such as Aaron ‘T-Bone’ Walker and Barrelhouse Chuck.
However, it was Albert Collins talk on Authentic Leadership which you found the most interesting. Albert was quite critical of Authentic Leadership and since your boss, Eddy ‘The Chief’ Clearwater, wants to know more, he has asked you to prepare a summary for him.
Outline the core criticisms of Authentic Leadership in practice AND as a theoretical framework in a memo to your boss. ( 400 words)
It is important to understand that the criticisms of Authentic Leadership are not conclusive, and the theory remains an important contribution to the field of leadership. However, it is essential to recognize that the theory is not perfect and has limitations. As such, it is crucial to approach the theory with a critical lens and consider the context in which leadership occurs.
Eddy ‘The Chief’ ClearwaterFrom:Subject: Criticisms of Authentic LeadershipDate: Dear Mr. Clearwater, After attending the conference on leadership held in the Southside of Chicago, I have prepared a summary of core criticisms of Authentic Leadership as a theoretical framework and practice. It is important to understand that the criticisms of Authentic Leadership are relatively new, and it is gaining traction as the research continues.
The theoretical framework of Authentic Leadership is criticized because of the following reasons: Firstly, it focuses on leaders as individuals, and there is little or no consideration of the impact of situational factors that influence leaders. This means that the context in which leadership occurs is ignored, and this can make the theory ineffective. Situational variables like stress, pressure, and role clarity can affect the actions of leaders.
Secondly, the theory presumes that leaders possess traits that can be easily identified. However, there is no clear agreement on what these traits are, and this makes the theory abstract.
Thirdly, there is no clear agreement on the behavioral patterns that can be used to define Authentic Leadership. Fourthly, there is a concern that the focus on individual leadership ignores the fact that leadership is a social process. This means that the relationship between the leader and the followers, as well as the context in which leadership occurs, is important in understanding leadership in practice. Fifthly, the theory has been criticized for being too general and does not offer any specific guidance to leaders on how to behave in different situations. The theory is seen as a ‘one-size-fits-all’ approach, and this is problematic as different situations require different leadership styles.
The practical application of Authentic Leadership is criticized because of the following reasons: Firstly, there is a lack of empirical evidence that supports the effectiveness of Authentic Leadership in practice. Research studies that support the theory have been criticized for being inadequate, and the samples used to test the theory are limited. Secondly, the theory ignores the fact that there are different cultural norms, and this can affect how leadership is perceived and practiced. For example, some cultures value humility, and this might not be seen as a desirable trait for leaders.
Finally, the theory is criticized for being too idealistic and does not consider the complexities of the real world. The theory assumes that leaders can behave in a certain way, but in practice, it may be difficult to implement the theory in a complex environment.
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How did Wilson promote his plans for a peaceful world order to the nation and the world as outlined in his Fourteen Points?
Woodrow Wilson promoted his plans for a peaceful world order through a combination of national and international efforts. He presented his Fourteen Points to both the nation and the world, emphasizing principles such as self-determination, disarmament, and the establishment of a League of Nations.
To promote his plans for a peaceful world order as outlined in his Fourteen Points, Woodrow Wilson employed various strategies to reach both the nation and the global community. On January 8, 1918, President Wilson delivered a speech to the U.S. Congress, presenting his vision for post-World War I peace. He outlined his Fourteen Points, which included principles like self-determination for nations, free trade, open diplomacy, and the reduction of armaments.
Wilson's speech garnered significant attention both domestically and internationally. He believed that open diplomacy and transparent negotiations were essential to building trust and ensuring lasting peace. Wilson's emphasis on self-determination resonated with many nations aspiring for independence and played a crucial role in shaping the post-war settlement. Additionally, he called for disarmament to prevent future conflicts and proposed the creation of a League of Nations, which would serve as a platform for international cooperation and conflict resolution.
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Production Possibilities Schedule for the town called Galaxy Town is indicated below: Explain the effect of new technology likely would have on Galaxy Town’s PPC. Please limit your answer to 4 sentences.
The effect of new technology on Galaxy Town's Production Possibilities Curve (PPC) would likely result in an outward shift or expansion of the curve.
This is because new technology enables increased productivity and efficiency in production processes, allowing the town to produce more goods and services with the same amount of resources. With new technology, Galaxy Town can achieve higher levels of output and potentially reach a new production frontier beyond the previous limitations imposed by current technology. This expansion of the Production Possibilities Curve (PPC) the town's increased potential for economic growth and the ability to produce a greater combination of goods and services.
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For 17 years, Janet saved $1,150 at the beginning of every month in a fund that earned 4.5% compounded annually.
a. What was the balance in the fund at the end of the period?
Round to the nearest cent
b. What was the amount of interest earned over the period?
Round to the nearest cent
Answer:
The balance in the fund at the end of the period is $283,143.98.
The amount of interest earned over the period is $138,993.98.
a. The balance in the fund at the end of the period is $283,143.98.
Janet saved $1,150 at the beginning of every month for 17 years. This means that she saved for 204 months.
The interest rate that she earned is 4.5% compounded annually.
The formula for compound interest is given as;
A = P(1 + r/n)^(nt)
Where;
A = the future value of the investment
P = the principal or the amount of money invested
r = the annual interest rate
n = the number of times the interest is compounded in a year
t = the number of years
If we substitute the given values in the above formula, we get;
A = $1,150 (1 + 0.045/12)^(12 × 17)
≈ $283,143.98
Therefore, the balance in the fund at the end of the period is $283,143.98.
b. The amount of interest earned over the period is $138,993.98.
The interest earned over the period is calculated by subtracting the principal from the final amount. We already know the final amount, which is $283,143.98.
Therefore, the amount of interest earned over the period is calculated as follows;
Interest = $283,143.98 - ($1,150 × 204)
≈ $138,993.98
Therefore, the amount of interest earned over the period is $138,993.98.
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Explain in words and illustrate graphically what happens to the supply of labour and the demand for labour when a country admits a large number of new inmigrants. Will the influx of immigrants inerease or depress the wages in the country that admits immigrants? Bxplain. (4)
The a country admits a large number of new immigrants, it affects both the supply and demand for labor. On the supply side, the labor force increases as more people enter the country seeking employment.
This expands the overall supply of labor available in the market. On the demand side, the increased population of immigrants also creates additional demand for goods and services, leading to increased job opportunities.The graphical representation of this scenario would show an outward shift of the labor supply curve, indicating the increase in available workers, and an outward shift of the labor demand curve, representing the increased demand for labor due to population growth.
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(Practice using perturbation method to estimate duration in this quetion) Given that interest rate is 5%. Consider a mortgage that produces $10000 a year cashflow and matures in 20 years. Step 1: calculate the price of the mortgage in excel Step 2: change the interest rate to 4.99% and 5.01%, and calculate the respective price of the mortgage in those cases Step 3: Calculate the duration of the mortgage with the formula in "Duration: Estimate" What is the duration of the mortgage? O 7.90 O O 8.90 O 9.90 O 10.90
The duration of the mortgage is 9.90.
Duration: Estimate of a bond's price sensitivity to interest rate changes is the expected percentage change in the price of a bond per unit change in interest rates, keeping all other variables constant, and the duration is defined as the bond's weighted average maturity time. The duration of a mortgage given that the interest rate is 5%, and the mortgage yields $10,000 a year and has a 20-year maturity can be estimated as follows:
Step 1: The mortgage's price in Excel can be calculated using the present value formula.PV = FV / (1 + r) ^ nwhere,
FV = $10,000 n = 20 years r = 5%
By substituting the given values in the above equation, we get the PV of the mortgage as $150,225.26.
Step 2: We must now determine the price of the mortgage when the interest rate changes to 4.99% and 5.01%. For that, we use the same formula as in step 1, with n and FV remaining constant but the interest rate changing to 4.99% and 5.01%, respectively.
PV at r = 4.99% = $150,297.27
PV at r = 5.01% = $150,153.33
Step 3: We can now calculate the duration of the mortgage using the formula given below.
Duration = [P(-) - P(+)] / [2 × P(0) × ∆r] where,P(-) = PV at 4.99%P(+) = PV at 5.01%)
P(0) = PV at 5%∆r = Change in interest rates (0.01%)
Substituting the values, we get
Duration = [150,153.33 - 150,297.27] / [2 × 150,225.26 × 0.0001]
Duration = 9.90 years
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Consider the following map of Eastern Europe. Is it possible to plan a round trip (on land) through the countries of Latvia, Lithuania, Belarus, Poland, Slovakia, and Ukraine that visits each country Exactly once? Is there more than one way to plan such a trip? How many pairs of these countries share a border?
Yes, it is possible to plan a round trip through the countries of Latvia, Lithuania, Belarus, Poland, Slovakia, and Ukraine that visits each country exactly once. One way to plan such a trip is to start in Latvia, then travel to Lithuania, Belarus, Poland, Slovakia, and finally Ukraine. This route ensures that you visit each country only once and return to your starting point.
There is only one way to plan such a trip, as each country can only be visited once in a round trip.
In terms of border sharing, let's examine the map. Latvia shares a border with Lithuania, Belarus, and Russia. Lithuania shares a border with Latvia, Belarus, and Poland. Belarus shares a border with Latvia, Lithuania, Poland, Slovakia, and Ukraine. Poland shares a border with Lithuania, Belarus, Slovakia, Czech Republic, Germany, and Ukraine. Slovakia shares a border with Poland, Czech Republic, Austria, and Ukraine. Ukraine shares a border with Belarus, Poland, Slovakia, Hungary, Romania, Moldova, and Russia.
Counting the pairs of countries that share a border, we have:
- Latvia shares a border with 3 countries
- Lithuania shares a border with 3 countries
- Belarus shares a border with 5 countries
- Poland shares a border with 6 countries
- Slovakia shares a border with 4 countries
- Ukraine shares a border with 7 countries
So, the number of pairs of these countries that share a border varies for each country, ranging from 3 to 7.
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You need $800 for retirement in 25 years. You start an annuity that offers 6.5% interest compounded monthly. How much money must you deposit monthly to reach your goal? Round up to the nearest dollar. $
You need $800,000*
You would need to deposit approximately $563.88 (rounded up to the nearest dollar) monthly to reach your retirement goal of $800,000 in 25 years.
To calculate the monthly deposit required to reach your retirement goal, we can use the formula for the future value of an ordinary annuity:
[tex]FV = P * [(1 + r)^{n} - 1] / r[/tex]
Where:
FV = Future value (goal amount) = $800,000
P = Monthly deposit
r = Monthly interest rate = 6.5% / 100 / 12 = 0.0054167
n = Number of compounding periods = 25 years * 12 months/year = 300
We can determine P by entering these values as substitutes in the formula:
$800,000 = P * [tex][(1 + 0.0054167)^{300} - 1][/tex] / 0.0054167
Simplifying the equation:
800,000 = P * ([tex]1.0054167^{300[/tex] - 1) / 0.0054167
800,000 * 0.0054167 = P * ([tex]1.0054167^{300[/tex] - 1)
4333.36 = P * (1.0054167^300 - 1)
P = 4333.36 / ([tex]1.0054167^{300[/tex] - 1)
P = $563.88
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Amaretta Company (a U.S.-based company) ordered merchandise from a foreign supplier on November 20 at a price of 1,210,000 rupees when the spot rate was $0.050 per rupee. Delivery and payment were scheduled for December 20. On November 20, Amaretta acquired a call option on 1,210,000 rupees at a strike price of $0.050, paying a premium of $0.001 per rupee. The company designates the option as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is measured by referring to changes in the spot rate. The option's time value is excluded from the assessment of hedge effectiveness, and the change in time value is recognized in net income. The merchandise arrives, and Amaretta makes payment according to schedule. Amaretta sells the merchandise by December 31, when it closes its books. a. Assuming a spot rate of $0.053 per rupee on December 20. prepare all journal entries to account for the foreign currency option, foreign currency firm commitment, and purchase of inventory. b. Assuming a spot rate of $0.048 per rupee on December 20, prepare all journal entries to account for the foreign currency option, foreign currency firm commitment, and purchase of inventory. Required A Reqiured B Assuming a spot rate of $0.053 per rupee on December 20, prepare all journal entries to account for the foreign currency option, foreign currency firm commitment, and purchase of inventory. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list 1 Record the purchase of the foreign currency option. 2 Record entry for order placed with foreign supplier. 3 Record the firm commitment at its fair value. 4 Record the entry to adjust the fair value on the foreign currency option. 5 Record the entry for foreign currency acquired at the spot rate. 6 Record receipt of goods and payment in rupees. X Credit 7 Record the entry to transfer the carrying value of inventory to cost of goods sold. 8 Record the entry to close the firm commitment account to net income. Required A Reqiured B Assuming a spot rate of $0.048 per rupee on December 20, prepare all journal entries to account for the foreign currency option, foreign currency firm commitment, and purchase of inventory. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list 1 Record the purchase of the foreign currency option. 2 Record entry for order placed with foreign supplier. 3 Record the firm commitment at its fair value. 4 Record gain or loss on the foreign currency option. 5 Record the entry to recognize the change in the time value of the foreign currency option. 6 Record entry for foreign currency acquired at spot rate. X " 10 Credit 7 Record receipt of goods and payment in rupees. 8 Record the entry to transfer the carrying value of inventory to cost of goods sold. 9 Record entry to close the firm commitment. 10 Record the entry to close the firm commitment account.
It is impossible to give a thorough response within the allotted word count considering the intricacy and quantity of diary entries necessary. I can provide you a summary of the diary entries for each situation, though.a. Assuming a spot rate on December 20 of $0.053 per rupee:1. Note the transaction for purchasing the foreign currency option:
Debit: Option for Foreign Currency Expense Credit: Cash 2. Record entry for the purchase order made with the international vendor: Debit: Credit for Inventory: Accounts Payable 3. Document the firm commitment at its fair market value: Debit: Firm Commitment in Foreign Currency Credit: Foreign Currency Firm Commitment Unrealized Gain/Loss 4. Enter the modification to the fair value on the foreign currency option as follows: Unrealized Gain or Loss on Foreign Currency, debit Foreign currency option: option credit 5. Enter the foreign money purchased at the spot rate as follows: Charge: Accounts Cash as Payable Credit 6. Note the receipt of the products and the rupee payment: Debit: Credit for Inventory: Cash 7. Make the following entry to convert carrying value of stock to cost of goods sold: Inventory Credit: Cost of Goods Sold Debit: 8. Enter the closing firm commitment account entry to net income: Unrealized Gain or Loss on Foreign Exchange Firm Commitment Debit: Credit: Net Profit a. Assuming a spot rate on December 20 of $0.048 per rupee: 1. Note the transaction for purchasing the foreign currency option: Debit: Option for Foreign Currency Expense Credit: Cash 2. Record entry for the purchase order made with the international vendor: Negative: Stock Credit: Payable Accounts 3. Document the firm commitment at its fair market value: Debit: Firm Commitment in Foreign Currency Credit: Foreign Currency Firm Commitment Unrealized Gain/Loss 4. Significant profit or loss on the foreign exchange option: Debit/Credit: Gain or Loss on Unrealized Foreign Currency Option 5. Make a note of the transaction to recognise the shift in the foreign currency option's time value :Unrealized Gain/Loss on Foreign Currency Option Credit: Debit: Foreign Currency Option Expense 6. Enter the foreign money purchased at the spot rate as follows: Charge: Accounts Cash as Payable Credit 7. Note the receipt of the goods and the rupee payment: Debit: Credit for Inventory: Cash 8. Make the following entry to convert carrying value of stock to cost of goods sold: Cost of Goods Sold Debit: Credit: Inventory 9. To complete the strong commitment, record entry: Credit: Net Income Debit: Unrealized Gain/Loss on Foreign Currency Firm Commitment 10. Enter the closing transaction to the firm commitment account: Credit: Foreign Currency Firm Commitment Debit: Unrealized Gain/Loss on Foreign Currency Firm Commitment Please be aware that the foregoing items are merely generic descriptions, and that the specifics may change depending on the company's accounting standards and procedures. For precise and thorough journal entries, it is always essential to seek the advice of a licenced accountant or to refer to the company's specific accounting policies.
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Best Efforts vs. Firm Commitment Securities Offering I. firm commitment basis An investment bank agrees to underwrite an issue of 20 million shares of stock for Murray Construction Corp. on a firm commitment basis. The investment bank pays $15.50 per share to Murray Construction Corp. for the 20 million shares of stock. (1) It then sells those shares to the public for $16.35 per share. How much money does Murray Construction Corp. receive? What is the profit to the investment bank? (2) If the investment bank can sell the shares for only $14.75, how much money does Murray Construction Corp. receive? What is the profit to the investment bank? II. best-efforts basis (1) Suppose, instead, that the investment bank agrees to underwrite the 20 million shares on a best-efforts basis. The investment bank is able to sell 18.4 million shares for $15.50 per share, and it charges Murray Construction Corp. $0.375 per share sold. How much money does Murray Construction Corp. receive? What is the profit to the investment bank? (2) If the investment bank can sell the shares for only $14.75, how much money does Murray Construction Corp. receive? What is the profit to the investment bank?
Murray Construction Corp. receives $264.1 million ($271 million - $6.9 million). The investment bank's profit would be $0 because it did not underwrite the entire issue and was not able to sell all of the securities.
A firm commitment securities offering is an offering of securities where the investment bank agrees to underwrite the entire issue. This means that the investment bank purchases all of the shares of stock from the issuer and then resells them to the public. On the other hand, a best-efforts securities offering is an offering of securities where the investment bank does not agree to purchase all of the securities from the issuer. Instead, the investment bank will do its best to sell as many securities as possible to the public. The issuer will then receive the proceeds from the sale of the securities that were sold. I. Firm commitment basis: 1. Murray Construction Corp. receives $15.50 per share for the 20 million shares of stock from the investment bank, which amounts to $310 million ($15.50 x 20,000,000). If the investment bank sells the shares to the public for $16.35 per share, it will generate $327 million ($16.35 x 20,000,000). The investment bank's profit would be $17 million ($327 million - $310 million). 2. If the investment bank sells the shares for only $14.75, it will generate $295 million ($14.75 x 20,000,000). In this case, Murray Construction Corp. still receives $310 million because the investment bank has underwritten the entire issue. II. Best-efforts basis: 1. The investment bank sells 18.4 million shares for $15.50 per share, which amounts to $284.4 million ($15.50 x 18,400,000). Murray Construction Corp. receives this amount minus the investment bank's fee, which is $6.9 million ($0.375 x 18,400,000). Therefore, Murray Construction Corp. receives $277.5 million ($284.4 million - $6.9 million). The investment bank's profit would be $6.9 million. 2. If the investment bank can sell the shares for only $14.75, it will generate $271 million ($14.75 x 18,400,000). Murray Construction Corp. receives this amount minus the investment bank's fee, which is $6.9 million. Therefore, Murray Construction Corp. receives $264.1 million ($271 million - $6.9 million). The investment bank's profit would be $0 because it did not underwrite the entire issue and was not able to sell all of the securities.For more questions on investment
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Which of the following is NOT true should a bank experience a shortage of cash reserves? a) It can change other financial assets into cash. b) It can borrow funds on the interbank market to eliminate the shortage. c) It will only approach the reserve bank if all other banks are experiencing the same liquidity problem. d) The cost of credit is not directly linked to the repurchase agreement rate. 1.6 Which of the following will increase the money supply? a) If the central bank buys shares of common stock in a large bank. b) If the central bank raises the minimum reserve ratio. c) If the central bank sells securities on the open market. d) If the central bank raises the discount rate. 1.7 If the cost of your petrol purchases decreases from R1 500 per month to R 800 over a period of one year due to lower prices and your income decreases from R 18 600 per month to R17 500 per month during that same period, your nominal income has... a) Increased, but your real income has decreased. b) Decreased, but your real income has increased. c) Increased, and your real income has increased. d) Increased, but your real income has remained the same.
C. It is not true that a bank will only approach the reserve bank if all other banks are experiencing the same liquidity problem when facing a shortage of cash reserves.
When a bank experiences a shortage of cash reserves, it can approach the central bank, such as the reserve bank, to address the liquidity issue. The central bank acts as the lender of last resort and provides funds to banks facing temporary liquidity shortages, regardless of whether other banks are experiencing similar problems. The central bank's role is to ensure the stability and smooth functioning of the financial system, and it assists individual banks as needed to maintain liquidity and prevent systemic disruptions. when facing a shortage of cash reserves. approach the reserve bank if all other banks are experiencing the same liquidity problem.
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XYZ Enterprise on 1st September, 2019 sold mining equipment to Alaho Quarry. XYZ Enterprise also agreed to service the machine for a two-year period from 1st September, 2019 for no additional charge. The total amount payable by the customer for this arrangement is GHE810,000 if Alaho Quarry pays by 31st January, 2020. The directors of XYZ Enterprise consider it highly probable the customer will pay for the equipment in January, 2010 The stand-alone selling price of the machine was GH€700, 000 and XYZ will normally expect to receive GHe 140,000 in consideration for providing two years' servicing of the equipment. Required: In accordance with IFRS 15: Revenue from Contract with Customers, account for the above transactions in the financial statements of XYX Enterprise for the year ended 30th ekon (7 marks) September, 2019
According to IFRS 15: Revenue from Contracts with Customers, XYZ Enterprise needs to account for the above transactions in its financial statements for the year ended 30th September, 2019.
Revenue Recognition for Equipment Sale: As of 1st September, 2019, XYZ Enterprise recognizes revenue for the sale of mining equipment to Alaho Quarry. The stand-alone selling price of the machine is GH€700,000, which is recognized as revenue upon transfer of control to the customer. Revenue Recognition for Service Agreement: XYZ Enterprise agrees to provide two years of servicing for the machine, starting from 1st September, 2019. The stand-alone selling price for the servicing is GHe 140,000. Since this service is provided for no additional charge as part of the equipment sale, no separate revenue is recognized for the service agreement. Payment Consideration: The total amount payable by Alaho Quarry is GHE810,000, which includes the cost of the equipment and the anticipated consideration for the servicing.
However, since the directors of XYZ Enterprise consider it highly probable that the customer will pay for the equipment in January 2020, the revenue is recognized in that period when payment is expected to be received. Therefore, for the financial statements for the year ended 30th September 2019, XYZ Enterprise would recognize revenue of GH€700,000 for the equipment sale. The revenue for the servicing agreement is not separately recognized as it is bundled with the equipment sale. The remaining consideration of GHE110,000 (GHE810,000 - GH€700,000) will be recognized in the financial statements of the subsequent period when payment is expected to be received (January 2020).
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Pearson Text Document Sharing Multimedia Library Chapter Resources Dynamic Study Modules Download Center Communication To Time Since Order Arrived (hours ago) Order Estimated Machine Time (hours) Due Date (hours from now) 9 20 7 21 8 12 3 8 12 10 The due dates refed the need for the order to be at its ned operation Develce separate schedules by using the FCPS and EDD nues. Compare the schedus on the basis of average four time and average past due hours Using the FCFS first come, first served) decision rule for sequencing the orders, the order 2 3 41 5 Sequence 1 Order 3 4 1 Using the EDDearest due date) decision rule for sequencing the orders, the urder is (o solve a se, use order in which the orders were received) Sequence Order the average flow time and average past due hours for each option are (enter your responses are real numbers rounded to two decimal places) Rule Average Flow Time Average Past Due Hours EDD FCFS
The average past due time for all orders is 3.25 hours.
EDD Rule:The Expected Due Date (EDD) scheduling technique is used to minimize the average lateness of the orders. For each order, EDD determines a due date depending on the order's processing time and the average number of orders.
The task is sequenced in non-decreasing order of EDD, which is the number of hours from the current time to the due date.FCFS Rule:In a First Come, First Served (FCFS) scheduling algorithm, the work order that arrives first is given priority, and the order that arrives next is processed after the first order is finished.
All orders are sequenced in the order in which they were received. The order sequence for FCFS is 2 3 4 1. The flow time for order 2 is 12-9=3 hours, for order 3 is 20-12=8 hours, for order 4 is 21-20=1 hour, and for order 1 is 8-21=-13 hours.
Average flow time is calculated as: (3+8+1+-13)/4 = -0.25 hours. The past due time for order 1 is 21-8=13 hours, for order 2 is 0, for order 3 is 0, and for order 4 is 0.
The average past due time for all orders is calculated as (13+0+0+0)/4 = 3.25 hours.
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You expect to receive $30,000 at graduation in two years. You plan on investing it at 7 percent until you have $100,000. How long will you wait from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
You will need to wait approximately 5.91 years from now to accumulate $100,000 by investing $30,000 at a 7% interest rate.
To determine how long you will need to wait from now to reach $100,000 by investing $30,000 at a 7% interest rate, we can use the formula for compound interest: Future Value = Present Value * (1 + Interest Rate)^Time. In this case, the Present Value (PV) is $30,000, the Future Value (FV) is $100,000, and the Interest Rate is 7%. We need to solve for Time (T). Rewriting the formula, we have: $100,000 = $30,000 * (1 + 0.07)^T. Dividing both sides of the equation by $30,000: 3.3333 = (1.07)^T.
Taking the natural logarithm (ln) of both sides to solve for T: ln(3.3333) = ln(1.07)^T; T * ln(1.07) = ln(3.3333); T = ln(3.3333) / ln(1.07). Using a calculator, we find that T ≈ 5.91. Therefore, you will need to wait approximately 5.91 years from now to accumulate $100,000 by investing $30,000 at a 7% interest rate.
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The main purpose of the Illinois Real Estate License Act of 2000 is to
A. regulate the real estate industry for the protection of the public
B. allow a forum where brokers may settle commission disputes
C. protect agents from unfair brokers
D. make sure every licensee is compensated fairly
The main purpose of the Illinois Real Estate License Act of 2000 is to regulate the real estate industry for the protection of the public, ensuring ethical practices and consumer protection.
The main purpose of the Illinois Real Estate License Act of 2000 is:
1. Regulation: The act aims to regulate the real estate industry in order to ensure the protection of the public.
It sets standards and requirements for obtaining and maintaining a real estate license, including education, ethics, and professional conduct.
2. Consumer Protection: The act establishes guidelines and provisions to safeguard consumers in real estate transactions.
It helps prevent fraud, misrepresentation, and unethical practices by real estate professionals, promoting transparency and accountability.
3. Licensing and Compliance: The act ensures that real estate agents and brokers are properly licensed, qualified, and adhere to the laws and regulations governing the industry.
It establishes mechanisms for monitoring and enforcing compliance with licensing requirements and professional standards.
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Required information [The following information applies to the questions displayed beiow. Shadee Corp. expects to sell 620 sun visors in May and 440 in June. Each visor sells for $22. Shadee's beginning and ending finished goods inventorles for May are 75 and 50 units, respectively. Ending finished goods inventory for June will be 60 units. Each visor requires a total of $5.00 in direct materials that includes an adjustable closure that the company purchases from a supplier at a cost of $2.00 each. Shadee wants to have 33 closures on hand on May 1,19 closures on May 31 , and 20 closures on June 30 . Additionally, Shadee's fixed manufacturing overhead is $1,400 per month, and variable manufacturing overhead is $2.25 per unit produced. Required: 1. Determine Shadee's budgeted cost of closures purchased for May and June. 2. Determine Shadee's budget manufacturing overhead for May and June. Complete this question by entering your answers in the tabs below. Determine Shadee's budgeted cost of elosures purchased for May and June. (Round your answers to 2 decimal places.)
Shadee's budgeted cost of closures purchased for May is $1,306.00 and for June is $920.00.
To determine Shadee Corp.'s budgeted cost of closures purchased for May and June, we need to consider the number of closures required and the cost per closure.
For May: Closures required for May 1: 33
Closures required for May sales (620 units * 1 closure per unit): 620
Total closures required for May: 33 + 620 = 653
The cost per closure is $2.00.
Budgeted cost of closures purchased for May: 653 * $2.00 = $1,306.00
For June: Closures required for June 30: 20
Closures required for June sales (440 units * 1 closure per unit): 440
Total closures required for June: 20 + 440 = 460
Budgeted cost of closures purchased for June: 460 * $2.00 = $920.00
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If I purchase a product and pay R 228,84 what will the VAT (15%) portion be of the paid amount?
(2)
If you purchase a sweater at Woolworths for R4999.99 what will the total amount be excluding VAT (15%)? (2)
You take your car for a service and you are quoted R4800.00 excluding VAT (15%). What will you total payment amount be? (2)
The answers are (1) The VAT portion of R 228.84 will be R 32.83.(2) The total amount excluding VAT for a sweater is R 4347.81.(3) The total payment amount for a car service excluding VAT is R 5520.00.
To calculate the VAT portion, we multiply the total amount by the VAT rate. In this case, 15% of R 228.84 is R 34.33. However, VAT is calculated on the pre-tax amount, so we need to subtract the VAT amount from the total to get the VAT portion, which is R 34.33 - R 228.84 = R 32.83.
(2) The total amount excluding VAT for a sweater which has cost price at R 4999.99 will be R 4347.81.
To calculate the total amount excluding VAT, we divide the given price by 1 plus the VAT rate. In this case, R 4999.99 / (1 + 0.15) = R 4347.81.
(3) The total payment amount for a car service quoted at R 4800.00 excluding VAT will be R 5520.00.
To calculate the total payment amount, we add the VAT amount to the quoted price. The VAT amount is 15% of R 4800.00, which is R 720.00. Therefore, the total payment amount is R 4800.00 + R 720.00 = R 5520.00.
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Explain the influence of consumer materialism, fixated consumption behaviour, and compulsive consumption behaviour in consumer buying decisions!
Consumer materialism is a term used to describe an individual's tendency to buy more, even if they do not need it. The person is said to be materialistic if they value material possessions over other things. They believe that their possessions reflect their identity and worth.
Fixated consumption behaviour refers to the way in which individuals become obsessed with a particular product or service. They may become fixated on a brand or a type of product, leading them to purchase that product repeatedly, even when it is not necessary. The influence of fixated consumption behaviour on consumer buying decisions is that people are more likely to buy products from a particular brand or company, even when there are other options available.
This is because they are familiar with the brand and may have an emotional attachment to it.Compulsive consumption behaviour is a term used to describe the tendency for individuals to engage in excessive or uncontrollable consumption. This is often related to addiction, and it is a behaviour that can have negative consequences for the individual and those around them. In terms of consumer buying decisions, compulsive consumption behaviour can lead people to buy things that they cannot afford or that they do not need.
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How do you plan to engage stakeholders when implementing the
individual
evaluation plan for anger management program (e.g., participate in
collecting data, help to interpret findings)?
To engage stakeholders in implementing the individual evaluation plan for an anger management program, it is important to involve them in data collection and interpretation of findings. This engagement can be achieved through various strategies such as providing training and resources, creating opportunities for collaboration and feedback, and ensuring clear communication channels.
Engaging stakeholders in the implementation of an individual evaluation plan for an anger management program is crucial for its success and effectiveness. To involve stakeholders in data collection, they can be provided with the necessary training and resources. This may include guidance on administering assessments or surveys, conducting interviews or focus groups, and collecting relevant data points.
In addition, stakeholders can be engaged in interpreting the findings by creating opportunities for collaboration and feedback. This can involve regular meetings or workshops where stakeholders can discuss the evaluation results, share their perspectives, and contribute their insights. By actively involving stakeholders in the interpretation process, their diverse knowledge and experiences can be harnessed to gain a comprehensive understanding of the program's impact and effectiveness.
Clear communication channels should be established to keep stakeholders informed about the evaluation process, progress, and outcomes. Regular updates, reports, and presentations can be shared with stakeholders to ensure transparency and foster their continued engagement.
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Present a solution to improve energy usage, from the perspective of an inspection official who is trying to provide suggestions to a household who wishes to make their home more energy efficient.
As an inspection official, there are various solutions that you can suggest to a household that wishes to make their home more energy-efficient. Some of these solutions include the Installation of Energy-Efficient Lighting, Seal Leaks, and Upgrade to Energy Star Appliances.
One of the ways of improving energy usage is by installing energy-efficient lighting systems. Such lighting systems use less electricity and, therefore, consume less energy. In addition, they also have a longer lifespan compared to traditional lighting systems. You can suggest the use of LED bulbs, which have a lower wattage and are much more efficient compared to traditional bulbs.
Another way to improve energy efficiency is by sealing any air leaks that may be present in the home. Air leaks allow cold air to get into the home, thus making the heating system work harder to maintain a comfortable temperature. This results in increased energy consumption. You can suggest the use of caulking, weather stripping, or foam sealant to seal gaps in doors, windows, and other openings in the home.
Appliances consume a significant amount of energy in a household. Upgrading to Energy Star appliances can help to reduce energy consumption. Energy Star appliances are designed to use less energy compared to traditional appliances. You can suggest the replacement of old appliances such as refrigerators, washing machines, and dishwashers with Energy Star-rated appliances.
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A manufacturing company suppliesits products to industrial job sites. The average monthly fixed cost per sit is RM 10,500, while each unit cost RM 20 to produce and selling price is RM 50 per unit. Determine the monthly breakeven volume.
The monthly breakeven volume for the manufacturing company is 350 units. This means that the company needs to sell at least 350 units per month to cover its fixed costs and break even.
To determine the monthly breakeven volume, we need to calculate the number of units that the manufacturing company needs to sell in order to cover its fixed costs.
The fixed costs per site are given as RM 10,500 per month. Since the company supplies its products to industrial job sites, we assume that there is only one site.
The unit cost to produce each product is RM 20, while the selling price is RM 50 per unit. This means that the company makes a profit of RM 30 per unit sold (RM 50 - RM 20).
To cover the fixed costs, the company needs to generate enough profit to equal the monthly fixed costs of RM 10,500. Since the profit per unit sold is RM 30, we can calculate the number of units needed to break even as follows:
Breakeven volume = Fixed costs / Profit per unit = RM 10,500 / RM 30 = 350 units.
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An automatic lathe produces rollers for roller bearings, and statistical process control charts are used to monitor the process. The central line of the chart for the sample means is set at 8.50 and for the range at 0.31 mm. The process is in control, as established by samples of size 5·The upper and lower specifications for the diameter of the rollers are (8.50 +0.25) and (8.50 0.25) mm, respectively. a. Calculate the control limits for the mean and range 28. charts. b. If the standard deviation of the process distribution is estimated to be 0.13 mm, is the process capable of meeting specifications? Assume four-sigma performance is desired. If the process is not capable, what percent of the output will fall outside the specification limits? (Hint: Use the normal distribution.) C.
The control limits for the mean are 8.32 and 8.68 mm, and for the range, they are 0 and 0.655 mm.
a. The control limits for the mean can be calculated using the following formulas:
Upper control limit (UCL) for the mean = Central line + (A2 * Range)
Lower control limit (LCL) for the mean = Central line - (A2 * Range)
Where A2 is a constant factor based on the sample size, which can be obtained from statistical tables. For a sample size of 5, A2 is typically 0.577.
UCL for the mean = 8.50 + (0.577 * 0.31) = 8.68
LCL for the mean = 8.50 - (0.577 * 0.31) = 8.32
The control limits for the range can be calculated using the following formulas:
Upper control limit (UCL) for the range = D4 * Range
Lower control limit (LCL) for the range = D3 * Range
Where D3 and D4 are constant factors based on the sample size. For a sample size of 5, D3 is typically 0 and D4 is 2.114.
UCL for the range = 2.114 * 0.31 = 0.655
LCL for the range = 0
b. To determine if the process is capable of meeting specifications, we can calculate the process capability index (Cpk) using the formula:
Cpk = (USL - LSL) / (6 * Standard Deviation)
Where USL is the upper specification limit, LSL is the lower specification limit, and Standard Deviation is the estimated standard deviation of the process distribution.
USL = 8.50 + 0.25 = 8.75
LSL = 8.50 - 0.25 = 8.25
Standard Deviation = 0.13
Cpk = (8.75 - 8.25) / (6 * 0.13) ≈ 0.641
Since the Cpk value is less than 1, the process is not capable of meeting specifications at the desired four-sigma level.
To determine the percentage of output that will fall outside the specification limits, we can use the normal distribution. Assuming a normal distribution, approximately 0.62% of the output will fall beyond ±4 standard deviations. However, since the process is not centered within the specification limits, the actual percentage outside the specification limits may be higher. A detailed analysis would be required to obtain a more accurate estimation.
The control limits for the mean are 8.32 and 8.68 mm, and for the range, they are 0 and 0.655 mm. The process is in control, as established by the samples. However, the process is not capable of meeting specifications at the desired four-sigma level, with a Cpk value of 0.641. Further improvement or adjustment is needed to bring the process within the required specifications.
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Create a SIPOC for Starbucks Coffee using the below template. Project SIPOC Project Date Suppliers Input Process Output Customer
SIPOC stands for Suppliers, Inputs, Process, Outputs and Customers.
The SIPOC is a visual tool for documenting a business process from beginning to end. It assists in identifying the relevant variables and potential flaws in the process. As a result, Starbucks Coffee's SIPOC can be created using the following template:Project SIPOC Project Date Suppliers Input Process Output CustomerStarbucks Coffee SIPOC 11/8/2021 Suppliers Coffee bean growers Coffee, Sugar, Milk, and Flavorings Blend coffee ingredients and steam milk to create customized drinks Lattes, Cappuccinos, and Americanos Customers who visit Starbucks storesAll Starbucks processes are aimed at providing excellent coffee to the consumers, but there are different types of coffee available at different prices for different customers. Starbucks provides a relaxed atmosphere for consumers to enjoy their drinks. This is the SIPOC of Starbucks Coffee in which all processes are shown from suppliers to customers.
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Eve brown is trying to save for her retirement. she believes she can earn 12% on average each year on her retirement fund. assume that at the beginning of each of the next 40 years, eve will allocate x dollars to her retirement fund. if at the beginning of a year eve has y dollar in her fund, by the end of the year, it will grow to 1.12y dollars.
a. using excel, develop a spreadsheet model to find out how much Eve should allocate to her retirement fund each year to ensure that she will have $1 million at the end of 40 years.
b. are there any key factors that are being ignored in our analysis of amount saved for retirement.
a. Using Excel, a spreadsheet model can be developed to calculate the annual allocation amount needed for Eve to reach $1 million in her retirement fund over 40 years, assuming a 12% average annual return.
b. The analysis overlooks important factors such as inflation, changing financial circumstances, investment risk, and other potential retirement income sources, which should be considered for a more comprehensive and accurate retirement plan.
a. To calculate the amount Eve should allocate to her retirement fund each year to reach $1 million at the end of 40 years, we can use Excel and the power of compounding interest. Here's how you can set up the spreadsheet model:
1. Open a new Excel worksheet.
2. In column A, starting from cell A1, enter the years from 1 to 40 (representing the 40-year period).
3. In column B, starting from cell B1, enter the allocation amounts for each year. Let's assume this amount is represented by the variable "x."
4. In column C, starting from cell C1, calculate the total fund value at the end of each year. The formula for this is "=B1*(1+12%)^(A1-1)" (without quotes). This formula takes the allocation amount for the year, multiplies it by the compound interest factor, and raises it to the power of the corresponding year minus one.
5. In cell C41, enter the formula "=SUM(C1:C40)" (without quotes). This formula sums up the total fund values over the 40-year period.
6. In cell B42, enter the target amount of $1 million.
7. In cell B43, enter the formula "=B42/B41" (without quotes). This formula calculates the allocation amount needed each year to reach the target amount.
8. Format the cells B1, B43, and C1:C40 as currency.
Once you've completed these steps, Excel will calculate the required allocation amount in cell B43, which is the value that Eve should allocate each year to ensure she will have $1 million at the end of 40 years.
b. There are indeed some key factors that are being ignored in this analysis of the amount saved for retirement. Here are a few important considerations:
1. Inflation: The analysis assumes a constant 12% annual return, but it doesn't account for inflation. Inflation erodes the purchasing power of money over time, so it's essential to consider the effects of inflation when planning for retirement.
2. Changing financial circumstances: The analysis assumes a consistent allocation amount each year. However, in reality, people's financial circumstances can change over time. Factors such as salary growth, unexpected expenses, or changes in income sources should be considered when determining the allocation amount.
3. Investment risk: The analysis assumes a constant 12% return, which may not always be achievable in the real world. Investment returns are subject to market fluctuations and risk. It's crucial to consider a diversified investment portfolio and assess the associated risks.
4. Other retirement income sources: The analysis only focuses on the amount saved in the retirement fund. However, individuals may have additional sources of retirement income, such as pensions or Social Security benefits. These factors should be considered when determining the required allocation amount.
By considering these additional factors and incorporating them into the analysis, a more accurate and comprehensive retirement plan can be developed.
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Sheffield Company purchased Machine #201 on May 1, 2020. The following information relating to Machine #201 was gathered at the end of May.
Price $113,900
Credit terms 2/10, n/30
Freight-in $ 1,072
Preparation and installation costs $ 5,092
Labor costs during regular production operations $14,070
It is expected that the machine could be used for 10 years, after which the salvage value would be zero. Sheffield intends to use the machine for only 8 years, however, after which it expects to be able to sell it for $2,010. The invoice for Machine #201 was paid May 5, 2020. Sheffield uses the calendar year as the basis for the preparation of financial statements.
(a)
Compute the depreciation expense for the years indicated using the following methods.
Depreciation Expense
(1) Straight-line method for 2020 $enter a dollar amount
(2) Sum-of-the-years'-digits method for 2021 $enter a dollar amount
(3) Double-declining-balance method for 2020 $enter a dollar amount
(a) The depreciation expenses for the indicated years using the following methods are as follows:
(1) Straight-line method for 2020: $11,300
(2) Sum-of-the-years'-digits method for 2021: $23,725
(3) Double-declining-balance method for 2020: $22,600
To compute the depreciation expense for the indicated years using different methods, we'll follow these steps:
1. Calculate the depreciable cost:
Depreciable cost = Purchase price - Salvage value
Depreciable cost = $113,900 - $0 (since salvage value is zero)
Depreciable cost = $113,900
2. Compute the straight-line depreciation expense for 2020:
Straight-line depreciation expense = Depreciable cost / Useful life
Straight-line depreciation expense = $113,900 / 10 (years)
Straight-line depreciation expense = $11,390 per year
Straight-line depreciation expense for 2020 (partial year) = $11,390 * (8/12) = $7,593.33
3. Calculate the sum-of-the-years'-digits depreciation expense for 2021:
Sum-of-the-years'-digits depreciation expense = (Remaining useful life / Sum of the digits) * Depreciable cost
Remaining useful life = Useful life - Years already depreciated
Remaining useful life = 10 - 1 (2020)
Remaining useful life = 9 years
Sum of the digits = n(n+1) / 2 = 10(10+1) / 2 = 55
Sum-of-the-years'-digits depreciation expense = (9 / 55) * $113,900
Sum-of-the-years'-digits depreciation expense = $18,683.64
4. Calculate the double-declining-balance depreciation expense for 2020:
Double-declining-balance rate = (1 / Useful life) * 2
Double-declining-balance rate = (1 / 10) * 2
Double-declining-balance rate = 0.2 or 20%
Double-declining-balance depreciation expense for 2020 (partial year) = Double-declining-balance rate * Depreciable cost * (8/12)
Double-declining-balance depreciation expense for 2020 = 0.2 * $113,900 = $22,780
Therefore, the depreciation expenses for the indicated years are as follows:
(1) Straight-line method for 2020: $7,593.33
(2) Sum-of-the-years'-digits method for 2021: $18,683.64
(3) Double-declining-balance method for 2020: $22,780
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QuickBooks
Question 1
You can make a bill payment directly from the bill.
true or false
Question 2
A Purchase Order must be prepared before purchasing and paying for Inventory.
True or False
Question 3
Reorder Points must be entered for each item of Inventory before that Inventory item can be sold.
True or False
Question 4
A Purchase Order may never be closed manually.
True
False
Question 5
The Purchase Discounts account is used for a discount on payments of Merchandise Inventory.
True or False
The statement "You cannot make a bill payment directly from the bill" is false. The statement "a purchase order must be prepared before purchasing and paying for inventory" is true. The statement "reorder points are not mandatory before selling inventory" is false. The statement "a purchase order can be manually closed once all associated activities are completed" is false. The statement "the Purchase Discounts account is not specifically used for discounts on payments of Merchandise Inventory" is false.
1: You can make a bill payment directly from the bill.
False. In general accounting practices, you typically cannot make a bill payment directly from the bill itself. When a bill is received from a supplier or vendor, it serves as a notification of the amount owed.
To make a payment, you usually need to initiate a separate transaction, such as writing a check, making an electronic funds transfer, or using an online payment platform. The bill itself is more like an invoice or statement, which provides information about the goods or services purchased and the amount owed.
2: A Purchase Order must be prepared before purchasing and paying for Inventory.
True. A purchase order is a document issued by a buyer to a supplier, indicating the intention to purchase goods or services. It outlines the details of the items being ordered, such as quantity, description, price, and delivery terms.
By preparing a purchase order before purchasing inventory, businesses ensure that they have a record of the agreed-upon terms with the supplier. This helps avoid misunderstandings or disputes later on. It also provides a reference for the accounts payable department to match against the supplier's invoice when making payment for the inventory.
3: Reorder Points must be entered for each item of Inventory before that Inventory item can be sold.
False. Reorder points are not a mandatory requirement before selling inventory. Reorder points are set to trigger a purchase order or replenishment when the inventory level reaches a certain threshold. They help maintain an adequate stock level to avoid stockouts.
While setting reorder points is a good inventory management practice, it is not a prerequisite for selling inventory. As long as the inventory is available and in a sellable condition, it can be sold irrespective of whether reorder points have been defined.
4: A Purchase Order may never be closed manually.
False. A purchase order can be manually closed once the related activities, such as receipt of goods or services and payment, have been completed. Manually closing a purchase order helps in accurate record-keeping and ensures that outstanding orders are not left open indefinitely.
By closing a purchase order, businesses can reconcile their accounts payable and maintain better control over their procurement processes. However, it's important to note that some accounting systems may have automated processes to close purchase orders automatically once all associated activities are fulfilled.
5: The Purchase Discounts account is used for a discount on payments of Merchandise Inventory.
False. The Purchase Discounts account is typically used to record discounts taken by the buyer for making prompt payments to the supplier. It is a contra expense account, meaning it reduces the cost of goods sold.
The discount is often offered as an incentive by the supplier to encourage early payment. On the other hand, Merchandise Inventory is an asset account that represents the cost of inventory held for sale.
While purchase discounts can affect the cost of goods sold and ultimately the inventory's value, the Purchase Discounts account itself is not specifically used for discounts on payments of Merchandise Inventory.
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Suppose public opinion is split 25% for and 75% against increasing taxes to help balance the federal budget. Suppose also that 60 people from the population are selected randomly and interviewed. a) Completely describe the sampling distribution of the sample proportion of people who are in favour of increasing taxes to help balance the federal budget. b) ( 2 marks) Is the normal approximation valid? Give reason. c) What is the probability the proportion favouring a tax increase is greater than 10% ?
a) The sampling distribution of the sample proportion of people who are in favor of increasing taxes can be described as a binomial distribution with parameters n = 60 (sample size) and p = 0.25 (proportion in favor of increasing taxes in the population). It represents the distribution of the number of individuals in favor of increasing taxes out of the 60 randomly selected people.
b) The normal approximation may be valid for the sampling distribution if the conditions for the normal approximation are satisfied. These conditions include having a sufficiently large sample size (n) and both np and n(1-p) being greater than or equal to 10. We need to check if np = 60 * 0.25 = 15 and n(1-p) = 60 * 0.75 = 45 satisfy this criterion.
c) To find the probability that the proportion favoring a tax increase is greater than 10%, we need to calculate the probability of observing more than 10% of the sample (i.e., more than 0.1 * 60 = 6 individuals) in favor of increasing taxes. We can use the normal approximation to estimate this probability by calculating the area under the normal curve above 6 individuals, using the mean and standard deviation from the binomial distribution.
a) The sampling distribution of the sample proportion follows a binomial distribution with parameters n = 60 (sample size) and p = 0.25 (proportion in favor of increasing taxes in the population). This means that for each sample of 60 individuals, we count the number of individuals in favor of increasing taxes and record that value. The sampling distribution represents the distribution of these recorded values, showing how likely different proportions are to occur.
b) To determine if the normal approximation is valid, we check if the conditions for the normal approximation are satisfied. These conditions are usually satisfied when np and n(1-p) are both greater than or equal to 10. In this case, np = 60 * 0.25 = 15 and n(1-p) = 60 * 0.75 = 45, satisfying the criterion. Therefore, the normal approximation is valid for this sampling distribution.
c) To calculate the probability that the proportion favoring a tax increase is greater than 10%, we need to find the probability of observing more than 6 individuals (0.1 * 60) in favor of increasing taxes. We can use the normal approximation to estimate this probability by calculating the area under the normal curve above 6 individuals. We can find the mean (μ) and standard deviation (σ) of the binomial distribution using the formulas μ = np = 60 * 0.25 = 15 and σ = sqrt(np(1-p)) = sqrt(60 * 0.25 * 0.75) ≈ 3.06. Then, we can use these values to find the z-score of 6, and calculate the probability using the standard normal distribution.
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