Answer: credited to the Dividend Revenue account.
Explanation:
If a company is using the cost method is used to account for an investment in common stock, then that common stock should be treated as an asset. This means that dividends that come from that company will be seen as revenue so this would be recorded in the dividend revenue account.
It will be accounted for in the cashflow statement of the company as either investing cashflow or operating. This would depend on if the company is using IFRS or U.S. GAAP.
An example of fast tracking a project schedule would be to overlap the design and production phases for a design-to-production project, where the conventional approach would be to move on to construction only after completing the design phase.
a. True
b. False
Answer:
a. True
Explanation:
Project management can be defined as the process of designing, planning, developing, leading and execution of a project plan or activities using a set of skills, tools, knowledge, techniques and experience to achieve the set goals and objectives of creating a unique product or service.
Generally, projects are considered to be temporary because they usually have a start-time and an end-time to complete, execute or implement the project plan.
Furthermore, the main purpose of project management is working toward a common goal.
This ultimately implies that, project managers should ensure adequate attention and time is taken to identify, analyze and manage capital, raw materials, people, system of tasks and other resources, so as to effectively and efficiently achieve a common goal with all project stakeholders.
The fundamentals of Project Management includes;
1. Project initiation
2. Project planning
3. Project execution
4. Monitoring and controlling of the project.
5. Adapting and closure of project.
In the execution of a project, delaying a task normally affects the start or finishing time of the other tasks (successors) in a project.
The amount of time that is permitted for an activity to be delayed without delaying the early start date of any immediately following (succeeding) activities refers to the free slack or having an adverse effect on entire project.
A project schedule can be defined as a plan that comprises of the deliverables, activities and milestones with respect to a project, especially by including the intended start and finish dates.
The time for the implementation or execution of a project can be fast-tracked by a project manager.
For example, you can fast-track a design-to-production project by overlapping the design and production phases; especially by moving on to construction only after completing the design phase.
Required: Mr. Jones, eager to please the board of directors, requests you, as the newly appointed management accountant, to prepare appropriate statements highlighting the following: a) The standard production cost per Wallop (3) b) A detailed reconciliation statement of the standard gross profit with the actual gross profit for the month of May. The reconciliation statement should show all possible variances in as much detail as possible. Note: Where applicable, clearly label your answer as favourable (F), or unfavourable (U). Failure to do so will cause you to forfeit
Answer:
I don't understand what you wrote
Explanation:
please reply sir
Lowden Company has a predetermined overhead rate of 160% and allocates overhead based on direct material cost.During the current period,direct labor cost is $50,000 and direct materials cost is $80,000.How much overhead cost should Lowden Company should apply in the current period?
A) $31,250.
B) $50,000.
C) $80,000.
D) $128,000.
E) $208,000.
Explain the nature of the exchange-rate risk for each of the following, from the perspective of the U.S. firm or person. In your answer, include whether each is a long or short position in foreign currency.
a. A small U.S. firm sold experimental computer components to a Japanese firm, and it will receive payment of 1 million yen in 60 days.
b. An American college student receives a birthday gift of Japanese government bonds worth 10 million yen, and the bonds mature in 60 days.
c. A U.S. firm must repay a yen loan, principal plus interest totaling 100 million yen, coming due in 60 days.
Answer:
a. U.S. firm has long position in yen since it has asset in yen.
b. An American student has long position in yen since it has asset of bonds in yen.
c. U.S. firm has liability position in yen, therefore it is short position.
Explanation:
a. The payment is to be received in next 60 days which means there is a risk of yen depreciation and then company will receive lower dollars. The company should hedge its exchange rate risk by selling yen now and buying dollars later.
b. The gift received in the form of bonds will mature in 60 days. There is uncertainty in dollar rate, if dollar appreciates against yen then student will receive less yen.
c. The dollar rate is unpredictable for yen in next 60 days. If yen appreciate then dollar will depreciate against yen and therefore amount of loan repayment will increase.
Financial statements that must be included in the annual report include all of the following except: _____________
a. the statement of cash flows
b. the balance sheet
c. the cash budget
d. the income statement
Answer:
c
Explanation:
Inflation affects the real value of future dollars and can therefore make signing long-term wage and loan agreements seem risky. This illustrates the issue of
Answer:
future price uncertainty
Explanation:
Inflation is a persistent rise in the general price levels
Types of inflation
demand pull inflation – this occurs when demand exceeds supply. When demand exceeds supply, prices rise
cost push inflation – this occurs when the cost of production increases. This leads to a reduction in supply. Higher prices are the resultant effect
Shoe leather cost is when people try to spend money immediately so they would not be holding money for a long time. This is because money loses its value in an inflation.
Menu costs are the costs of changing price constantly as a result of inflation, When there is inflation, prices increases regularly. As a result prices needs to be updated regularly.
Moonbeam Company manufactures toasters. For the first 8-months of 2017, the company reported the following operating results while operating at 75% of plant capacity:
Sales (350,000 units) $4,375,000
Cost of goods sold 2,600,000
Gross profit 1,775,000
Operating expenses 840,000
Net income $935,000
Cost of goods sold was 70% variable and 30% fixed; operating expenses were 80% variable and 20% fixed. In September, Moonbeam receives a special order for 21,600 toasters at $8.12 each from Luna Company of Ciudad Juarez. Acceptance of the order would result in an additional $3,100 of shipping costs but no increase in fixed costs.
Required:
a. Prepare an incremental analysis for the special order.
b. Should Moonbeam accept the special order? Why or why not?
Answer:
Moonbeam Company
a. Incremental Analysis:
Sales revenue:
Units of toasters (21,600 at $8.12) $175,392
Variable costs (21,600 * $7.12) 153,792
Shipping costs 3,100
Total incremental costs $156,892
Incremental net income $18,500
b. Moonbeam should accept the special order. It has the required capacity to deliver the additional toasters. It will generate an incremental income of $18,500, which is better than nothing.
Explanation:
a) Data and Calculations:
Sales (350,000 units) $4,375,000
Cost of goods sold 2,600,000
Gross profit 1,775,000
Operating expenses 840,000
Net income $935,000
Operating capacity = 75%
Current sales = 350,000
Plant capacity = 466,667 units (350,000/75%)
Total Per Unit
Sales (350,000 units) $4,375,000 $12.50
Variable cost of goods sold = 1,820,000 ($2,600,000 * 70%)
Variable operating expense = 672,000 ($840,000 * 80%)
Total variable costs = $2,492,000 $7.12
Net income = $1,883,000
Special Order:
Incremental Sales revenue
Units of toasters (21,600 at $8.12) $175,392
Variable costs (21,600 * $7.12) 153,792
Shipping costs 3,100
Total incremental costs $156,892
Incremental net income $18,500
Wealth Company has the following transactions for the month of November: Purchased materials on account for $300,000 Materials requisitioned for $75,000 Direct labor for the month was incurred (but not yet paid) of $50,000. Actual overhead for the month was $30,000. It has not been paid yet. (Charge to various payables.) Overhead is applied to production at the rate of 50% of direct labor. Jobs totaling $50,000 were transferred from Work-in-Process to Finished Goods. Jobs costing $34,000 were sold. Balances at the beginning of the month were: Materials $34,240 Work-in-Process 0 Finished Goods $12,000 What is the ending balance of Finished Goods
Answer:
Wealth Company
The ending balance of Finished Goods is:
= $28,000
Explanation:
a) Data and Calculations:
Raw materials $300,000 Accounts Payable $300,000
Work in Process $75,000 Raw materials $75,000
Work in Process $50,000 Payroll Payable $50,000
Manufacturing overhead $30,000 Overhead Payable $30,000
Work in Process $25,000 Manufacturing Overhead $25,000
Finished Goods $50,000 Work-in-Process $50,000
Cost of goods sold $34,000 Finished Goods $34,000
Balances at the beginning of the month were:
Materials $34,240
Work-in-Process 0
Finished Goods $12,000
Finished Goods $12,000
Work in process 50,000
Cost of goods (34,000)
Ending balance $28,000
There is a proverb "anything worth doing is worth doing well." Do you think an economist would agree with this proverb? A. No, because doing something well has no next best alternatives with which to compare. B. Yes, because the marginal of extra effort is typically as effort increases. C. Yes, because doing something to the best of your ability is optimizing behavior. D. No, because the marginal cost of extra effort may be greater than the marginal benefit. E. , because the total net benefit of extra effort is by definition.
Answer:
D. No, because the marginal cost of extra effort may be greater than the marginal benefit.
Explanation:
Marginal cost can be defined as the additional or extra cost that is being incurred by a company as a result of the production of an additional unit of a product or service.
Generally, marginal cost can be calculated by dividing the change in production costs by the change in level of output or quantity.
Utility can be defined as any satisfaction or benefits a customer derives from the use of a product or service.
This ultimately implies that, any satisfaction or benefits a customer derives from the use of a product or service is generally referred to as a utility.
Furthermore, the marginal utility of goods and services is the additional satisfaction that a consumer derives from consuming or buying an additional unit of a good or service.
Hence, an economist wouldn't agree with the proverb (anything worth doing is worth doing well.) because the marginal cost of extra effort may be greater than the marginal benefit.
This ultimately implies that, the satisfaction that an individual such as an entrepreneur would derive from putting in more efforts into a business would be lesser than the cost incurred. As a result, he would not benefit anything or generate profit from his efforts.
An important issue when developing a new service or changing an existing one is the question of how different the new service is compared to the current services offered by the firm. Which of the following is not a general factor to consider when determining this?a. Similarity to current servicesb. Similarity of expected customers to current customersc. Similarity to current processesd. Financial justification
Answer:
Option b: Similarity of expected customers to current customers
Explanation:
Designing Service Products
This is an essential requirements when developing a new service or changing an existing one. There is this view or notion of how different the new service is compared to the current services offered by the firm. There are three general factors to consider when determining this. It includes:
1. Similarity to current service
2. Current process
3. Financial justification
Characteristics of Product Design Process
It includes:
1. The companies often bring new products to market
2. There is an integral to success
3. It differs significantly depending on the industry etc.
The Major factors in design strategy includes;
1. Cost
2. Quality
3. Time to market
4. Customer satisfaction
5. Competitive advantage
Nick’s Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $475,000, have a fifteen-year useful life, and have a total salvage value of $47,500. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $ 240,000 Less operating expenses: Commissions to amusement houses $ 70,000 Insurance 45,000 Depreciation 28,500 Maintenance 30,000 173,500 Net operating income $ 66,500 Required: 1a. Compute the payback period associated with the new electronic games. 1b. Assume that Nick’s Novelties, Inc., will not purchase new games unless they provide a payback period of five years or less. Would the company purchase the new games?
Answer:
a. 5 years
b. Yes they will because the payback period is 5 years.
Explanation:
a. Payback period
First calculate the annual cash inflow:
= Net income + Depreciation
= 66,500 + 28,500
= $95,000
The investment cost was $475,000
Payback period = Investment cost / Annual cash inflow
= 475,000 / 95,000
= 5 years
b. The company will purchase the games because they have a payback period of 5 years.
The following information is given about two fixed coupon bonds from Company A and Company B, both of which have several years left until maturity. Both bonds have a par value of $1,000. Based on this information, which of the following is most accurate?
Company A Company B
Coupon = 4% Coupon = 8%
Yield = 6% Yield = 6%
A. Company A’s bond is priced higher than Company B’s and Company B’s bond is traded at a premium
B. Company A’s bond is priced lower than Company B’s and Company B’s bond is traded at a premium
C. Company A’s bond is priced higher than Company B’s and Company B’s bond is traded at a discount
D. Company A’s bond is priced lower than Company B’s and Company B’s bond is traded at a discount
Answer: B. Company A’s bond is priced lower than Company B’s and Company B’s bond is traded at a premium
Explanation:
Discount bond ⇒ Bond coupon rate is less than yield which leads to bond having a lower than par price.
Premium bond ⇒ Bond coupon rate is more than yield which leads to bond having higher than par price.
Company A therefore has a discount bond that has a low price compared to Company B which has a premium bond which means that its price is relatively high.
Company B's bond is therefore priced higher than Company A's bond.
A 22-year old college student has been promised a $1 million check at this 50thbirthday (28years from today). What is the present value of the $1 million today assuming an interest rate of 5%
Answer:
$255,093.64
Explanation:
Calculation to determine the present value of $1 million today
Using Financial calculator
PV = PV (rate, nper, pmt, fv, type)
Where,
FV = $1,000,000
Annual Interest rate = 5%
Number of periods = 28
Let plug in the formula
PV = PV (5%, 28, 0, -1000000, 0)
PV= $255093.64
Therefore the Present value of $1 million today is $255,093.64
The adjusted trial balance of Pronghorn Corp at December 31, 2022, includes the following accounts: Retained Earnings $17,000, Dividends $6,700, Service Revenue $36,300, Salaries and Wages Expense $14,000, Insurance Expense $1,880, Rent Expense $4,080, Supplies Expense $1,440, and Depreciation Expense $900.
Required:
Prepare an income statement for the year.
Answer and Explanation:
The preparation of the income statement is presented below:
Service Revenue $36,300
Less:
Salaries and Wages Expense $14,000
Insurance Expense $1,880
Rent Expense $4,080
Supplies Expense $1,440
Depreciation Expense $900
Net income $14,000
Basically we subtracted the expenses from the revenues in order to get the net income
Emphasis on the quantitative aspects of products sold (ie: portion size, price) and services offered (the time it takes to get the product) is called
Answer:
Calculability
Explanation:
A transaction can be defined as a business process which typically involves the interchange of goods (products), financial assets, services and money between a seller and a buyer.
A product can be defined as any physical object or material that typically satisfy and meets the demands, needs or wants of customers. Some examples of a product are mobile phones, television, microphone, microwave oven, bread, pencil, freezer, beverages, soft drinks etc.
A service can be defined as an intangible (immaterial), non-physical activities, satisfactions or benefits that are offered for sale by a business service or provided to accompany the sales of a product. Thus, it's an action that involves offering something to a service taker or customer in return for an amount of money as payment.
In Business management, calculability is the emphasis of a business firm on the quantitative aspects (portions, price, size) of products sold and services offered (the time it takes the consumer to get the product). Thus, calculability avails a business firm the opportunity to emphasize on the quantity of product sold rather than a qualitative factor.
The name which is given to the emphasis on the quantitative aspects of products sold (ie: portion size, price) and services offered (the time it takes to get the product) is called
Calculability
Calculability has to do with the ability to make calculations on the goods which are transacted by a company at any given time and how the services which were offered such as time taken to get the product.
With this in mind, we know that in a capitalist state, the main aim of any business is to make profit and calculability is used to show the quantitative aspects of the products which are sold and the services offered to determine profit.
Read more about calculability here:
https://brainly.com/question/759158
Klean Fiber Company is the creator of Y-Go, a technology that weaves silver into its fabrics to kill bacteria and odor on clothing while managing heat. Y-Go has become very popular in undergarments for sports activities. Operating at capacity, the company can produce 1,053,000 Y-Go undergarments a year. The per unit and the total costs for an individual garment when the company operates at full capacity are as follows.
Per Undergarment Total
Direct materials $1.96 $2,063,880
Direct labor 0.47 494,910
Variable manufacturing overhead 0.98 1,031,940
Fixed manufacturing overhead 1.41 1,484,730
Variable selling expenses 0.38 400,140
Totals $5.20 $5,475,600
The U.S. Army has approached Klean Fiber and expressed an interest in purchasing 249,700 Y-Go undergarments for soldiers in extremely warm climates. The Army would pay the unit cost for direct materials, direct labor, and variable manufacturing overhead costs. In addition, the Army has agreed to pay an additional $1.01 per undergarment to cover all other costs and provide a profit. Presently, Klean Fiber is operating at 70% capacity and does not have any other potential buyers for Y-Go. If Klean Fiber accepts the Army’s offer, it will not incur any variable selling expenses related to this order.
Required:
Prepare an incremental analysis for the Klean Fiber.
Answer:
Klean Fiber Company
Incremental Analysis for the
Special order by the U.S. Army:
Units to be purchased = 249,700
Sales Revenue $4.42
Variable costs:
Direct materials $1.96
Direct labor 0.47
Variable manufacturing overhead 0.98
Total variable costs 3.41
Additional for contribution margin 1.01
Contribution margin = $252,197 ($1.01 * 249,700)
Explanation:
a) Data and Calculations:
Annual production capacity = 1,053,000
Per Undergarment Total
Direct materials $1.96 $2,063,880
Direct labor 0.47 494,910
Variable manufacturing overhead 0.98 1,031,940
Fixed manufacturing overhead 1.41 1,484,730
Variable selling expenses 0.38 400,140
Totals $5.20 $5,475,600
There is an increase in the demand for aspirin at the same time as workers in the aspirin industry receive a substantial pay increase. What will most likely happen?
Answer:
There would be an increase in equilibrium quantity and there would be an indeterminate effect on equilibrium price
Explanation:
One thousand dollars is invested at 5% continuous annual interest. this means the value of the investment will grow exponentially, with k equaling the decimal rate of interest. What will the value of the investment be after 7 1/2 years?
a. $1, 375.00.
b. $375.00.
c. $1, 454.99.
d. $454.99.
The following information is available regarding the total manufacturing overhead of Molsen Company for a recent four-month period. Molsen's projected August operations will require approximately 110,000 machine hours. Using the high-low method, compute total manufacturing overhead estimated for August. Group of answer choices $177,500. $187,500. $197,500. $198,000.
Answer:
$198,000
Explanation:
Calculation to determine what the total manufacturing overhead estimated for August is
First step is to calculate the Variable element
Variable element=($198,000 - $153,000)/(110,000 - 80,000)
Variable element=$45,000/30,000
Variable element= $1.50
Second step is to calculate the Fixed element
Fixed element=$198,000 - ($1.50 x 110,000)
Fixed element=$198,000-$165,000
Fixed element = $33,000
Now let compute total manufacturing overhead
Total manufacturing overhead=$33,000 + ($1.50 x 110,000)
Total manufacturing overhead=$33,000+$165,000
Total manufacturing overhead= $198,000
Therefore Using the high-low method, compute total manufacturing overhead estimated for August is $198,000
Suppose you invest every quarter, for 20 years, in an annuity that pays 5% interest, compounded quarterly. At the end of the 20 years, you have $100,000. How much of this total is interest
Answer: $41,228
Explanation:
The first step is to determine the amount that was being invested, in other words, the annuity.
First find the future value of annuity factor:
= 1 * Future value of annuity formula
= 1 * ( ( 1 + rate)^ number of periods) - 1) / rate
Rate = 5% / 4 = 1.25%
Number of periods = 20 * 4 quarters = 80 quarters
Annuity factor = 1 * ( ( 1 + 1.25%) ⁸⁰ - 1) / 1.25%
= 136.118795
The annuity is:
Future value of annuity = Annuity * Future value of annuity factor, 80 years, 1.25%
100,000 = Annuity * 136.118795
Annuity = 100,000 / 136.118795
= $734.65
The interest is:
= Future value of annuity - (Annuity * number of periods)
= 100,000 - (734.65 * 80)
= $41,228
The beta coefficient A stock's contribution to the market risk of a well-diversified portfolio is called risk. According to the Capital Asset Pricing Model (CAPM), this risk can be measured by a metric called the beta coefficient, which calculates the degree to which a stock moves with the movements in the market. Based on your understanding of the beta coefficient, indicate whether each statement in the following table is true or false: Statement True False A stock that is more volatile than the market will have a beta of less than 1.0. Over time, a stock with a beta of 1.0 produces a return that goes up and down with a 1:1 relationship with the return on the market Beta measures the volatility in stock movements relative to the market. There are different ways of calculating the beta coefficient for a stock. Using the information given in the following table, calculate the beta coefficient of Stocki: Data 35.00% 32.00% Stock I's standard deviation Market's standard deviation Correlation between Stock i and the market Beta coefficient of Stock i: 0.65 To calculate the beta of another company, using regression analysis, you get the value of Ra as 0.27. Based on your calculation, which of the following interpretations is true? The percentage of variance in the company's stock explained by the market is lower than that of a typical stock. The percentage of variance in the company's stock explained by the market is higher than that of a typical stock.
Solution :
1. The relevant risk is considered as the "unknown unknowns" which may occur due to the risk in everyday life. In all risky investments, it is unavoidable. The contribution of the stock to the market risk in a well diversified portfolio is called as the relevant risk. Diversification is the main strategy for minimizing the relevant risk.
2.
Statement : A stock that is more volatile than the market will have a beta of less than 1.0.
---- False, as it will be more volatile with that of the market.
Statement : Over time, a stock with a beta of 1.0 produces a return that goes up and down with a 1:1 relationship with the return on the market
---- True as beta of the market is 1 and therefore, the stock beta is also 1.
Statement : Beta measures the volatility in stock movements relative to the market.
--- True. The beta measures all the volatility in the stock moments relative to the market.
3. We know that :
[tex]$\text{Beta= Correlation coefficient} \times \frac{\text{SD of stock}}{\text{SD of market}} $[/tex]
[tex]$=0.65 \times \frac{35}{32}$[/tex]
= 0.71
4. The percentage of the variance in the stock of the company that is explained by the market is lower than that of the typical stock.
Each scenario below gives some information about price elasticity of demand for a firm. Use this information to answer the questions.
Honest Abe's Used Cars estimates the price elasticity of demand for their cars to be 5.10. Last month, Abe tried a new marketing scheme which decreased the number of cars sold by 57%.
Abe must have___prices. Abe's prices must have changed by___. Therefore, Abe's total revenue____.
At Webs-R-Us, a website design company, the new manager has decided to increase the price of Webs-R-Us services by 45%. If Webs-R-Us has a price elasticity of demand at 0.70, we can expected the number of websites designed to____. Therefore, Webs-R-Us's total revenue will The number of websites will change by_____.
Answer:
Increased
2.907%
decreased
decrease
increase
0.64
Explanation:
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
Price elasticity of demand = percentage change in quantity demanded / percentage change in price
Abe's elasticity of demand is elastic because it has a value greater than 1.
if quantity demanded decreases, it means that price must have been increased. this would lead to a decrease in total revenue
If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.
Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one
Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded.
Infinitely elastic demand is perfectly elastic demand. Demand falls to zero when price increases
Perfectly inelastic demand is demand where there is no change in the quantity demanded regardless of changes in price.
Using the Base Case, calculate total depreciation expense for the year 2023E. Assume that depreciation expense on assets pre-2020E is $15,000 per year. Depreciation on capital expenditures made from 2020E-2024E assumes a 4-year useful life and a salvage value equal to 10% of the original cost.
Review Later
a) $19,500
b) $33,000
c) $30,000
d) $20,000
Answer:
b) $33,000
Explanation:
Capital Expenditure = $20,000
Salvage Value in % = 10%
Useful Life = 4 Years
Salvage Value = Salvage Value% * Capital Expenditure
Salvage Value = 10% * 20,000
Salvage Value = $2,000
Annual Depreciation = (Capital Expenditures - Salvage Value) / Useful Life
Annual Depreciation = ($20,000 - $2,000) / 4
Annual Depreciation = $18,000 / 4
Annual Depreciation = $4,500
Depreciation of 2023E = Depreciation Pre 2020E + Depreciation on capital expenditures in 2020E + Depreciation on capital expenditures in 2021E + Additional Depreciation on capital expenditures in 2022E + Additional Depreciation on capital expenditures in 2023E
Depreciation of 2023E = $15,000 + $4,500 + $4,500 + $4,500 + $4,500
Depreciation of 2023E = $33,000
Supriya invested $14,320 in a highly rated ETF. At the end of four years, she had $18,434. What was her annual effective yield on this investment
Answer:
6.517%
Explanation:
Present Value PV = $14,320
Future Value FV = $18,434
Number of period Nper = 4
Annual effective yield = Rate(Nper, Pmt, Pv, -Fv)
Annual effective yield = Rate(4, 0, 14320, -18434)
Annual effective yield = 0.06517
Annual effective yield = 6.517%
King, CPA, is auditing the financial statements of Cycle company, a client that has receivables from customers arising from the sale of goods in the normal course of business. King is aware that the confirmation of accounts receivable is a generally accepted auditing procedure.
Required:
a. Under what circumstances could King justify omitting the confirmation of Cycle’s accounts receivable? In designing confirmation request, what factors are likely to affect King’s assessment of the reliability of confirmations that King sends?
b. What alternative procedures could King consider performing when replies to positive confirmation requests are not received?
Answer:
King, CPA
Auditing the financial statements of Cycle Company
a-1 Circumstances under which the omission of the confirmation of accounts receivable may be justified by King:
1. Accounts receivable are immaterial because of their values.
2. Low risk concerning accounts receivable.
3. Reliance can be placed on analytics and substantive tests to detect misstatements.
4. Using confirmations may be ineffective.
a-2) Factors that are likely to affect King's assessment of the reliability of confirmations:
1. The assessed skills of the recipients to confirm their balances.
2. The existence of verifiable customer records.
3. Proper documentations of transactions.
b. The alternative procedures that King could consider performing when replies to positive confirmation requests are not received are:
1. The auditor can conduct substantive tests, with tests of detailed transactions and analytical procedures.
2. Examination of cash receipts, sales orders, invoices, shipping documents, and correspondence files.
Explanation:
Where accounts receivable balances are material, the auditor is required to send out requests to customers to confirm their balances. The confirmation may be in the form of a negative, positive, or blank confirmation, depending on the prevailing circumstances and the assessed risks.
If two firms are identical in all respects except that one has more of the fixed input capital than another, the marginal product curve for the firm with more capital: Group of answer choices will lie above the marginal product curve for the firm with less capital. must equal the marginal product curve for the firm with less capital. will lie below the total marginal curve for the firm with less capital. will show no diminishing marginal returns.
Answer: will lie above the marginal product curve for the firm with less capital.
Explanation:
Capital is needed to produce goods and services and ideally speaking, when more capital is invested, more goods and services will be able to be produced because more should bring in more.
It is the same case here, if the companies are similar in everything except capital invested, the company with more capital will be able to produce more goods and services which will lead to their marginal product curve lying above the marginal product curve of the company with less capital.
On December 31, there were 53 units remaining in ending inventory. These 53 units consisted of 9 from January, 10 from February, 14 from May, 8 from September, and 12 from November. Using the specific identification method, what is the cost of the ending inventory
Answer:
Cost of the ending inventory = $7,108
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
A company had the following purchases during the current year:
January 17 Units at $112
February 37 Units at $123
May 32 Units at $135
September 29 Units at $143
November 27 Units at $153
On December 31, there were 53 units remaining in ending inventory. These 53 units consisted of 9 from January, 10 from February, 14 from May, 8 from September, and 12 from November. Using the specific identification method, what is the cost of the ending inventory?
Explanation of the answer is now provided as follows:
Specific identification method is an inventory method under which costs of goods sold and the closing/ending inventory are calculated using the particular cost of each inventory batch at the moment they were received.
Therefore, cost of the ending inventory is calculated as sum of the product of the number of closing units from each month and the cost per unit of purchases in that month.
Therefore, we have:
Cost of the ending inventory = (Number of closing units from January * Cost per unit of January Purchases) + (Number of closing units from February * Cost per unit of February Purchases) + (Number of closing units from May * Cost per unit of May Purchases) + (Number of closing units from September * Cost per unit of September Purchases) + (Number of closing units from November * Cost per unit of November Purchases) ………… (1)
Substituting the relevant values into equation (1), we have:
Cost of the ending inventory = (9 * $112) + (10 * $123) + (14 * $135) + (8 * $143) + (12 * $153) = $7,108
Your client is employed by a large multinational corporation headquarteredin your city. She worked for the company in her native country for five years before being assigned to a U.S.-based position last year. she knows that her employer arranged for a visa for her, but he is unsure about what type of visa and doesn't have any of her paperwork. Your client is likely:__________A) an undocumented immigrantB) a foreign nationalC) a naturalized citizenD) a lawful permanent resident
Answer:
The correct options A) an undocumented immigrant.
Explanation:
Undocumented immigrants are foreign nationals who are in the United States without legal documentation.
These immigrants either entered the US without being screened as required by immigration processes, or they entered the country on a temporary visa and stayed over the visa's expiration date, rendering the visa invalid.
This implies that your client is likely an undocumented immigrant. Therefore, the correct options A) an undocumented immigrant.
Suppose that the reason the jewelry was brand new and at such a bargain price online was because the seller actually stole the jewelry. If the jewelry were stolen, what type of title would Hugo hold when he purchased the jewelry
Answer: d. Void.
Explanation:
The seller stole the jewelry and so does not hold any legal title to the jewelry in the first place. The seller cannot therefore pass something that they do not possess which means that Hugo did not get a title.
Hugo's supposed title is therefore void which means that should the real owner of the jewelry ever find out that he has it, they can simply come back and claim it without needing to pay Hugo for it.
Waupaca Company establishes a $350 petty cash fund on September 9. On September 30, the fund shows $104 in cash along with receipts for the following expenditures: printing expenses, $40; postage expenses, $123; and miscellaneous expenses, $80. The petty cashier could not account for a $3 shortage in the fund.
Prepare:
(1) the September 9 entry to establish the fund,
(2) the September 30 entry to reimburse the fund, and
(3) an October 1 entry to increase the fund to $400.
Answer: Please see explanation for answers
Explanation:
Journal to record establishment of fund
Date Account titles and explanation Debit Credit
Sept 9 Petty cash $350
To Cash $350
Journal to record the reimbursement of petty cash fund
Date Account titles and explanation Debit Credit
September 30 printing expenses $40
Postage expense $123
Miscellaneous expenses $80
Cash shortage - not accounted for $3
To Cash $246
Journal to show the increment of fund to $400
Date Account titles and explanation Debit Credit
October 1 Petty cash $50
To Cash $50
Calculation : ($400 - $350)=$50
