True. Inventory turn values that are considered good can vary depending on the industry and the type of products being handled. Different industries have different supply chain dynamics, sales patterns, and inventory requirements.
Additionally, products with different characteristics, such as perishable goods or high-value items, may have different optimal inventory turn rates.
For example, industries like fast-moving consumer goods (FMCG) typically aim for high inventory turnover to ensure fresh and timely product availability. On the other hand, industries with specialized or custom products may have lower inventory turnover rates due to longer production cycles or unique customer demands. Therefore, it is true that inventory turn values that are considered good can differ by industry and the type of products being handled.
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Riverdale, Inc. is undergoing liquidation since January 1, 2022. Its condensed statement of realization and liquidation as of March 31, 2022, showed: Assets to be realized P1,375,000 Liabilities not liquidated P1,700,000 Assets acquired 250,000 Liabilities to be liquidated 2,250,000 Assets realized 1,200,000 Liabilities assumed 1,625,000 Assets not realized 400,000 Supplementary charges 500,000 Liabilities liquidated 1,875,000 Supplementary credits 655,000 If cash balance at the end is P1,500,000, how much is the cash balance on January 1, 2022? * K (2 Points) Enter your answer
The cash balance on January 1, 2022, was P-355,000.
In the given scenario, Riverdale Inc. is going through liquidation since January 1, 2022. Its condensed statement of realization and liquidation on March 31, 2022, is given as below:Assets to be realized P1,375,000Assets acquired 250,000Assets realized 1,200,000Assets not realized 400,000Liabilities not liquidated P1,700,000Liabilities to be liquidated 2,250,000Liabilities assumed 1,625,000Liabilities liquidated 1,875,000Supplementary charges 500,000Supplementary credits 655,000We need to determine the cash balance on January 1, 2022, given that the cash balance at the end is P1,500,000.Cash Balance on January 1, 2022: Cash realized during the liquidation process = P1,200,000Supplementary credits = P655,000Total Cash realized = P1,200,000 + P655,000 = P1,855,000Cash balance at the end of liquidation = P1,500,000Therefore, cash balance on January 1, 2022, can be calculated as:Cash balance on January 1, 2022 = Cash balance at the end of liquidation - Total cash realized during the liquidation process - Supplementary credits= P1,500,000 - P1,200,000 - P655,000= P-355,000Therefore, the cash balance on January 1, 2022, was P-355,000.For more questions on cash balance
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Problem 8-3A Book versus Tax Depreciation Payton Delivery Service purchased a delivery truck for $28,200. The truck will have a useful life of six years and zero salvage value. For the purposes of preparing financial statements, Payton is planning to use straight-line depreciation. For tax purposes, Payton follows MACRS. Deprecia- tion expense using MACRS is $5,650 in Year 1, $9,025 in Year 2, $5,400 in Year 3, $3,250 in each of Years 4 and 5, and $1,625 in Year 6. Required 1. What is the difference between straight-line and MACRS depreciation expense for each of the six years? 2. Payton's president has asked why you use one method for the books and another for tax cal- culations. "Can you do this? Is it legal? Don't we take the same total depreciation either way?" he asked. Write a brief memo answering his questions and explaining the benefits of using two methods for depreciation.
Payton Delivery Service purchased a delivery truck for $28,200 and plans to use straight-line depreciation for financial statements and MACRS for tax purposes. The depreciation expenses under each method differ for each of the six years. The president questions the legality and purpose of using two different depreciation methods and wonders if the total depreciation is the same.
The difference between straight-line and MACRS depreciation expenses arises from the different depreciation methods allowed for financial reporting and tax purposes. Straight-line depreciation evenly allocates the cost of an asset over its useful life, while MACRS follows a specific tax schedule that allows for accelerated deductions. In this case, the MACRS depreciation expenses are higher in the early years and decrease over time.
Using two methods for depreciation is legal and common practice. The purpose is to align financial statements with the economic reality of the asset's consumption and to comply with tax regulations. The benefits include accurately reflecting the asset's value and usage on financial statements, ensuring consistency with accounting principles, and optimizing tax deductions. By using MACRS for tax purposes, Payton can benefit from larger tax deductions in the earlier years, which can improve cash flow and reduce taxable income. Ultimately, using two depreciation methods helps balance financial reporting and tax considerations.
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what is globalization?group of answer choicesthe shift toward a more interdependent and integrated global economy.the perspective of a shrinking world due to fast travel.isolated to european mercantile stock companies as they expanded in search of new markets.b. isolated to european mercantile stock companies as they expanded in search of new markets.a new international phenomenon of the 21st century.
Globalization is the shift toward a more interdependent and integrated global economy. This term is often used to describe the perspective of a shrinking world due to fast travel. Answer option "A" is correct.
In simple terms, globalization can be defined as the process of international integration resulting from the exchange of world views, ideas, culture, and products. It has been occurring for centuries, but it gained significant momentum in the late 20th century.The shift toward a more interdependent and integrated global economy is a result of the forces of globalization. In the contemporary era, the phenomenon of globalization has reached new heights. It has transformed the way people do business, travel, and communicate. Thus, the correct answer is option A - the shift toward a more interdependent and integrated global economy.
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Name: Cost of Goods Sold Assignment #2 Instructions: You have one week (June 1st) to complete this assignment. You may not work in teams or ask any of your colleagues for help in any way. This assignment is graded on 5 % and will count for 5% of your final mark. A passing grade for this quiz is 3% (60%). The assignment will be grades as follows: Criteria Total LIFO Calculation 1.5% FIFO Calculation 1.5% Average Cost Calculation 1.5% Inventory Question .5% Total 5% You work for Global Tracking Inc. a company that sells a real-time tracking bracelet that tracks patients and nurses in different healthcare environments using GPS technology. designed for individuals who wish to monitor others' whereabouts. There has been an increase in demand for the product has spiked during the current fiscal period, while supply is limited, causing the selling price to escalate rapidly. Note: For simplicity of demonstration, beginning inventory cost is assumed to be $21 per unit for all cost assumption methods. The following is a chart of the inventory purchases in the last year Number of Units Unit Cost Sales Price Beginning Inventory Jul. 1 150 $21 Sold Jul. 5 120 $36 Purchased Jul. 10 225 27 Sold Jul. 15 180 39 Purchased Jul. 25 210 33 Ending Inventory Jul. 31 285 Assume that 300 units were sold in the fiscal year. Calculate the Cost of Goods Sold for the fiscal year for Global Tracking Inc. under the LIFO, FIFO and Average Cost inventory valuation methods. If the company wants to have a higher balance in the Inventory Account on the Balance Sheet which method should it use?
Global Tracking Inc. sells tracking bracelets and needs to calculate the Cost of Goods Sold (COGS) for the fiscal year using three inventory valuation methods: LIFO, FIFO, and Average Cost. The chart provided includes inventory purchases, sales, and ending inventory for the month of July. The company sold 300 units in the fiscal year.
To calculate the COGS for the fiscal year, the company needs to apply the LIFO, FIFO, and Average Cost inventory valuation methods. Each method determines the cost of goods sold differently based on the assumption of how inventory costs flow.
LIFO (Last In, First Out) assumes that the most recently purchased inventory is sold first. FIFO (First In, First Out) assumes that the earliest purchased inventory is sold first. Average Cost takes the weighted average of all inventory costs.
To calculate the COGS, the company would use the respective valuation method and apply it to the units sold. The cost per unit would vary depending on the method used. The assignment requires calculations for LIFO, FIFO, and Average Cost based on the given inventory purchases and sales data.
Regarding the question of which method would result in a higher balance in the Inventory Account on the Balance Sheet, it would depend on the movement of inventory costs over time. If the cost of inventory is increasing, using FIFO would result in a higher balance in the Inventory Account as the earlier purchased inventory is valued at lower costs. However, if the cost of inventory is decreasing, using LIFO would yield a higher balance in the Inventory Account as the more recently purchased inventory is valued at higher costs. Ultimately, the choice of inventory valuation method depends on the company's specific circumstances and objectives.
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unemployment that results because the number of jobs available in some labor markets may be insufficient to give a job to everyone who wants one is called . a. the natural rate of unemployment. b. cyclical unemployment. c. structural unemployment. d. frictional unemployment.
Answer:
Explanation:
Unemployment that results because the number of jobs available in some labor markets may be insufficient to give a job to everyone who wants one is called c. structural unemployment.
Structural unemployment occurs due to imbalances in the labor market, such as a mismatch between the skills or qualifications of job seekers and the available job openings. It is typically a result of long-term changes in the economy, technological advancements, or shifts in industries.
The other options listed are not accurate in this context:
a. The natural rate of unemployment refers to the typical, non-zero level of unemployment that exists even when the economy is at full employment.
b. Cyclical unemployment is caused by economic downturns or recessions and is associated with the overall business cycle.
d. Frictional unemployment is temporary unemployment that arises from the time it takes for job seekers to find suitable employment matches.
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If government purchases equals $100 million, consumption is $200 million, net exports is $0 and investment is $50 million, what is the total expenditure for the economy? $ million
The total expenditure for the economy is $350 million. This includes $100 million in government purchases, $200 million in consumption, and $50 million in investment, while net exports are assumed to be zero.
Total expenditure in an economy is the sum of four components: government purchases, consumption, investment, and net exports. In this case, government purchases are given as $100 million, consumption is $200 million, net exports are assumed to be zero, and investment is $50 million.
To calculate the total expenditure, we add up these four components. Adding $100 million in government purchases, $200 million in consumption, $0 million in net exports, and $50 million in investment gives us a total expenditure of $350 million.
Therefore, the total expenditure for the economy is $350 million.
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As an element of evaluating demand for a product, ___ ___ can be defined as the change in total costs that results from producing one additional unit of a product.
As an element of evaluating demand for a product, marginal cost can be defined as the change in total costs that results from producing one additional unit of a product.
Marginal cost is a crucial concept in economics and business analysis. It represents the additional cost incurred when producing one more unit of a product. By calculating the marginal cost, businesses can assess the impact on their total costs as production levels increase. It helps in understanding the cost structure and determining the optimal production quantity. Understanding the marginal cost is essential for making informed decisions regarding production levels, pricing strategies, and assessing profitability. It enables businesses to analyze the relationship between costs and output, identify economies of scale, and optimize resource allocation. By comparing marginal cost with the price or revenue generated from each additional unit, businesses can determine the profitability of expanding production or adjusting pricing strategies.
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Discuss the different types of financial statements that are prepared for the business and comment on the usefulness of these statements prepared.
There are four main types of financial statements that are commonly prepared for businesses: the income statement, balance sheet, cash flow statement, and statement of retained earnings. Each statement serves a specific purpose and provides valuable information for different stakeholders.
1. Income Statement:
The income statement, also known as the profit and loss statement, shows the revenues, expenses, and resulting net income or net loss for a specific period of time. It provides a snapshot of a company's financial performance and its ability to generate profits. The income statement is useful for owners, investors, and creditors to assess the profitability and operational efficiency of the business.
2. Balance Sheet:
The balance sheet presents a company's financial position at a specific point in time, usually at the end of a reporting period. It includes the company's assets, liabilities, and shareholders' equity. The balance sheet provides insights into the company's liquidity, solvency, and overall financial health. It is valuable for investors, lenders, and potential business partners who want to assess the company's financial stability and evaluate its ability to meet its obligations.
3. Cash Flow Statement:
The cash flow statement tracks the inflows and outflows of cash within a business during a specific period. It categorizes cash flows into three main sections: operating activities, investing activities, and financing activities. The cash flow statement helps analyze the sources and uses of cash, assess the company's cash-generating ability, and evaluate its liquidity and cash management. It is particularly useful for investors, creditors, and management in monitoring cash flow fluctuations and assessing the company's ability to fund its operations and investments.
4. Statement of Retained Earnings:
The statement of retained earnings shows the changes in a company's retained earnings over a specific period. It includes net income, dividends, and other adjustments that affect the retained earnings balance. This statement reflects the portion of earnings that has been retained in the business rather than distributed to shareholders as dividends. The statement of retained earnings is useful for shareholders, as it provides insights into the company's dividend policy, reinvestment of profits, and overall shareholder value creation.
The usefulness of these financial statements lies in their ability to provide relevant and reliable information to various stakeholders. These statements allow investors to assess the company's financial performance and make informed investment decisions. Lenders can evaluate the company's creditworthiness and repayment capacity. Management can analyze financial trends, identify areas of strength and weakness, and make informed business decisions. Regulators and tax authorities use these statements to ensure compliance with reporting and taxation requirements.
Overall, financial statements play a critical role in providing transparency and accountability in business operations. They enable stakeholders to assess the financial health and performance of a company, make informed decisions, and understand the value and risks associated with their involvement in the business.
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the primary task of any business is to . question 23 options: a) differentiate in terms of cost of production b) create customer needs c) reduce competition d) deliver customer value at a profit
The primary task of any business is to deliver customer value at a profit. This means that businesses should focus on meeting customer needs and providing value through their products or services in a way that generates revenue and sustains profitability.
The primary task of a business is to deliver customer value at a profit. This means that businesses should prioritize meeting customer needs and providing value through their products or services. Customer value refers to the perceived benefits and satisfaction that customers derive from a business's offerings. By delivering value, businesses can attract and retain customers, which ultimately leads to revenue generation and profitability.
While reducing competition and differentiating in terms of cost of production can be important strategies for businesses, they are not the primary tasks. Reducing competition may be pursued through various means, such as offering unique products, superior customer service, or innovative solutions. However, these strategies are employed as a means to deliver value and gain a competitive advantage in the market.
Similarly, differentiating in terms of cost of production can be a strategy to achieve a competitive edge, but it should be aligned with delivering value to customers. Cost differentiation can help a business offer competitive pricing or improved cost-efficiency, which can enhance customer value. However, the focus should always be on delivering value to customers while maintaining profitability.
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Standard Materials Cost The controller at your shoemaking company has determined that under normal conditions, you will spend $8.50 per unit of materials, and it will take 2.8 units of material per pair of shoes. Given this information, calculate the standard cost of materials per pair of shoes. If require, round the standard cost per pair of shoes to the nearest cent. Standard Price per Unit of Material Standard Materials per Pair Standard Cost per pair x Manufacturing Costs Direct Materials 8.60 ✓ per unit 2.8 units 24.08 Feedback Check My Work Use the standard price and standard materials values shown to compute the standard cost per pair. . Actual Materials Cost During January, your shoemaking company incurred actual direct materials costs of $69,059 for 7,590 units of direct materials in the production of 2,225 pairs of shoes. Given this information, calculate the actual cost of materials per unit. If require, round the actual cost of materials per unit to the nearest cent. Actual Total Cost of Materials Actual Materials Used Actual Cost per Unit Manufacturing Costs / Direct Materials $ 69,069 7,590 ✓ units $ 9.1 ✓ Feedback Check My Work Use the actual total cost of materials and actual materials used as shown to compute the actual cost per unit of materials. APPLY THE CONCEPTS: Conduct the Direct Materials Cost Variance Analysis Complete the following graphic compute the direct materials price variance, the direct materials quantity variance, and the total direct materials cost variance for your shoe-making business. When required, enter the rates as dollars and cents. If required, use the minus sign to indicate a negative value. Illustrated Example: Calculating Direct Materials Cost Variance Actual Cost Standard Cost Actual Materials Actual Rate Actual Materials x Standard Rate Standard Materials Standard Rate 7,590 9.10 7,590 8.60 3,795 X 8.60 ✓ = 69,069 65,274 Actual Cost Standard Cost Actual Materials Actual Rate Actual Materials Standard Rate Standard Materials Standard Rate 7,590 9.10 7,590 S 8.60 3,795 x 8.60 s 69,069 65,274 Direct Materials Quantity Variance Direct Materials Price Variance 69,069 $ 65,274 S 3,795 U 65,274 Total Direct Materials Cost Variance 69,069 15,491 U Feedback Check My Work Pull down each of the values from the sections above and track the values down following the arrows. To determine standard materials used, multiply the number of shoes actually completed times the standard quantity of materials that should be used per shoe. Feedback Check My Work Partially correct
Direct Materials Cost Variance Analysis: Direct Materials Quantity Variance: $3,795 Unfavorable Direct Materials Price Variance: $3,795 Unfavorable Total Direct Materials Cost Variance: $15,491 Unfavorable
The Direct Materials Quantity Variance is calculated by multiplying the difference between the actual materials used (7,590 units) and the standard materials used (3,795 units) by the standard price per unit ($8.60), resulting in a $3,795 Unfavorable variance. The Direct Materials Price Variance is determined by multiplying the actual materials used (7,590 units) by the difference between the actual price per unit ($9.10) and the standard price per unit ($8.60), yielding another $3,795 Unfavorable variance. The Total Direct Materials Cost Variance is the sum of the Quantity and Price variances, resulting in a $15,491 Unfavorable variance.
The shoe-making company experienced variances that indicate unfavorable outcomes in both the quantity and price of direct materials used. The total cost variance reflects an overall unfavorable deviation from the standard cost of materials for the production of shoes.
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David and Darlene Jasper have one child, Sam, who is 6 years old (birthdate July 1, 2010). The Jaspers reside at 4639 Honeysuckle Lane, Los Angeles, CA 90248. David’s Social Security number is 577-11-3311, Darlene’s is 477-98-4731, and Sam’s is 589-22-1142. David’s birthdate is May 29, 1984 and Darlene’s birthday is January 31, 1986. David and Darlene’s earnings and withholdings for 2016 are:
David:
Earnings from Apple Company (office manager)
$26,125
Federal income tax withheld
2,800
State income tax withheld
1,050
Darlene:
Earnings from Rose Company (perfume tester)
$25,100
Federal income tax withheld
2,650
State income tax withheld
900
Their other income includes interest from Pine Tree Savings and Loan of $1,825. Other information and expenditures for 2016 are as follows:
Interest:
On home acquisition mortgage
$11,250
Credit card
925
Taxes:
Property taxes on personal residence
1,300
State income taxes paid in 2016 (for 2015)
315
Contribution (with written acknowledgement) to church
990
Medical insurance
475
Medical and dental expenses
5,800
Income tax return preparation fee paid in 2016
200
Actual general state sales tax for 2016
1,016
Payment of union dues
225
David and Darlene received the following letter from Sam’s daycare provider:
In 2016, David lost his job. David paid for one month of insurance out-of-pocket and then the family went without insurance for September through December 2016. They are not eligible for any exemptions from health care coverage.
Required: Complete the Jaspers’ federal tax return for 2016. Use Form 1040, Schedule A, Schedule B, Form 2441, and the Shared Responsibility Payment Worksheet and the Flat Dollar Amount Worksheet. Make realistic assumptions about any missing data.
To complete the Jaspers’ federal tax return for 2016 using Form 1040, Schedule A, Schedule B, Form 2441, and the Shared Responsibility Payment Worksheet.
The Flat Dollar Amount Worksheet, the following steps must be followed:
Step 1: Filling out Form 1040 to determine adjusted gross income The Jaspers should begin by filling out Form 1040, which starts with entering their filing status and personal exemptions. Since they are married and filing a joint return, they should select “married filing jointly” on Line 3. The exemption on Line 6a is $4,050, and since there are three exemptions, they can enter a total exemption amount of $12,150 on Line 6d.Their wages, salaries, and tips are reported on Line 7. David’s total wages are $95,000, and Darlene’s total wages are $72,000, so their combined total wages are $167,000. Sam has no earned income and is claimed as a dependent on their tax return, so they don’t need to report his Social Security number on Line 6c.Their interest income from their bank accounts is reported on Line 8a. They have $1,000 of interest income, which they report on Line 8a. They don’t have any dividend income, so they leave Line 9a blank.The total income on Line 22 is $168,000, which is the sum of Lines 7 and 8a.
Step 2: Determining adjusted gross income The Jaspers’ adjusted gross income is calculated on Line 37 by subtracting their deductions from their total income. The standard deduction for married couples filing jointly in 2016 is $12,600, so they can enter that amount on Line 40. Their adjusted gross income on Line 37 is $155,400.
Step 3: Determining taxable income and tax liabilityThe Jaspers’ taxable income is determined on Line 43 by subtracting their exemptions and deductions from their adjusted gross income. Since they claimed the standard deduction, their taxable income is $142,250.Their tax liability is calculated on Line 44, which is $31,262.50 based on the 2016 Tax Table.
Step 4: Calculating the child tax creditThe child tax credit is calculated on Form 1040, Line 52. The Jaspers’ child tax credit is $1,000 for Sam.
Step 5: Completing Schedule A to calculate itemized deductionsThe Jaspers should complete Schedule A to determine if they should itemize their deductions or claim the standard deduction. Since their itemized deductions add up to $22,000, which is greater than the standard deduction of $12,600, they should itemize their deductions.
Step 6: Completing Form 2441 to calculate the child and dependent care creditThe child and dependent care credit is calculated on Form 2441. The Jaspers’ daycare expenses are $9,000 for Sam. Since they have two earners, they can claim up to $6,000 of daycare expenses on Form 2441. Their credit is calculated as follows: $6,000 x 20% = $1,200
Step 7: Completing Schedule B to report interest and dividend incomeThe Jaspers do not have any dividend income, but they do have $1,000 of interest income that they report on Schedule B.
Step 8: Completing the Shared Responsibility Payment Worksheet and the Flat Dollar Amount WorksheetThe Jaspers do not need to make a shared responsibility payment because they had qualifying health coverage for the entire year.
On January 1, Blossom Corporation purchased a 25% equity in Helbert Corporation for $156,500. AL December 31, Helbert declared and paid $44,000 cash dividend and reported net income of $213,000. Journalize the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter o for the amounts. Record journal entries in the order presented in the problem.)
Blossom Corporation records a 25% equity investment in Helbert Corporation. Blossom Corporation records its share of Helbert Corporation's net income. Blossom Corporation records its share of Helbert Corporation's cash dividend.
On January 1, Blossom Corporation purchased a 25% equity in Helbert Corporation for $156,500. This investment is recorded as an investment in an equity account. The investment is valued at the fair market value of the equity purchased.
On December 31, Helbert Corporation declared and paid a $44,000 cash dividend. Blossom Corporation's share of this dividend is $11,000 (25% x $44,000). This dividend is recorded as a dividend income account.
Blossom Corporation also records its share of Helbert Corporation's net income of $213,000. Blossom Corporation's share of this net income is $53,250 (25% x $213,000). This income is recorded as an equity in the earnings of the investee account.
The following are the journal entries:
Date Account Title Debit Credit
Jan. 1 Investment in Equity $156,500
Cash $156,500
(To record the purchase of a 25% equity in Helbert Corporation)
Dec. 31 Dividend Income $11,000
Cash $11,000
(To record the receipt of a cash dividend from Helbert Corporation)
Dec. 31 Equity in Earnings of Investee $53,250
Investment in Equity $53,250
(To record Blossom Corporation's share of Helbert Corporation's net income).
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which of the following statements is true? responses the concept of assigning weights to the possible states of nature is only a way of describing the mental process analysts go through to determine the expected return. the concept of assigning weights to the possible states of nature is only a way of describing the mental process analysts go through to determine the expected return. investment analysts do not need to be skilled at predicting the future to properly assign expected returns. investment analysts do not need to be skilled at predicting the future to properly assign expected returns. investment analysts spend most of their time building tables that reflect all the possible states of nature and assigning probabilities to each. investment analysts spend most of their time building tables that reflect all the possible states of nature and assigning probabilities to each. there are usually only 5 or 6 meaningful states of nature.
The true statement is that investment analysts spend most of their time building tables that reflect all the possible states of nature and assigning probabilities to each.
The concept of assigning weights to the possible states of nature is only a way of describing the mental process analysts go through to determine the expected return. Investment analysts spend most of their time building tables that reflect all the possible states of nature and assigning probabilities to each.
It is necessary for investment analysts to be skilled at predicting the future to properly assign expected returns.
Expected return is the projected return on investment. An investor calculates the expected return of an investment by multiplying the anticipated return for each possible outcome of an investment by its respective probability of occurring. Investment analysts use this formula to help investors make informed decisions.
By calculating the expected return, investors can identify the best opportunities, as well as the risks and rewards that come with them. Investment analysts spend most of their time building tables that reflect all the possible states of nature and assigning probabilities to each.
This process involves analyzing data, reviewing market trends, and making educated guesses about future events.
Analysts use this information to calculate the expected return, which provides a reliable estimate of the potential gains or losses associated with an investment.
A good investment analyst is one who can accurately predict the future. This requires a deep understanding of market trends, economic indicators, and the specific factors that influence a particular industry.
By staying up-to-date on the latest news and trends, analysts can make more informed decisions and help investors maximize their returns.
In conclusion, investment analysts spend a significant amount of time analyzing data, building tables, and assigning probabilities to different outcomes.
This process helps investors make informed decisions and identify the best investment opportunities.
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olding everything else constant, the absolute value of the price elasticity of demand for saucony tennis shoes is ________ the price elasticity of demand for tennis shoes.
The absolute value of the price elasticity of demand for Saucony tennis shoes is the same as the price elasticity of demand for tennis shoes in general.
The absolute value of the price elasticity of demand measures the responsiveness of the quantity demanded of a product to changes in its price, regardless of the direction of the change (increase or decrease). It is a numerical value that indicates the percentage change in quantity demanded relative to the percentage change in price.
In this case, holding everything else constant means that all other factors affecting demand, such as income, consumer preferences, and availability of substitutes, remain unchanged. Since the absolute value of price elasticity of demand captures the responsiveness of quantity demanded to price changes, it does not differentiate between specific brands or types of tennis shoes. Thus, the absolute value of the price elasticity of demand for Saucony tennis shoes would be the same as the price elasticity of demand for tennis shoes in general.
It's important to note that the price elasticity of demand for tennis shoes, including Saucony tennis shoes, can still vary depending on various factors such as the availability of close substitutes, brand loyalty, and consumer preferences. However, when considering the absolute value of the price elasticity of demand, which focuses solely on the responsiveness to price changes, it would be the same for Saucony tennis shoes as for tennis shoes in general.
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During May, Hatch Company accumulated 660 hours of direct labor costs on Job 200 and 550 hours on Job 305. The total direct labor was incurred at a rate of $11 per direct labor hour for Job 200 and $13 per direct labor hour for Job 305. Journalize the entry to record the flow of labor costs into production during May. If an amount box does not require an entry, leave it blank. blank - Select - - Select - - Select - - Select
To record the flow of labor costs into production during May for Hatch Company, we need to journalize the entry.
The direct labor costs for Job 200 and Job 305 are calculated as follows:
Direct labor cost for Job 200:
660 hours * $11/hour = $7,260
Direct labor cost for Job 305:
550 hours * $13/hour = $7,150
The journal entry to record the flow of labor costs into production during May would be as follows:
Date Account Debit Credit
May Work in Process $14,410
(or Manufacturing Overhead if applicable)
May Wages Payable $14,410
Explanation:
The debit to Work in Process represents the increase in the labor costs incurred for both Job 200 and Job 305 during May, totaling $14,410. This reflects the flow of labor costs into the production process. The corresponding credit is to Wages Payable, as this represents the liability to pay the wages to the employees for their direct labor work.
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Heartland Airways operates commuter flights in three Midwestern states. Due to a political convention held in Topeka, the airline added several extra flights during a two-week period. Additional cabin crews were hired on a temporary basis. However, rather than hiring additional flight attendants, the airline used its current attendants on overtime. Monica Gaines worked the following schedule on August 10. All of Gaines’s flights on that day were extra flights that the airline would not normally fly.Regular time: 2 round-trip flights between Topeka and St. Louis (8 hours)Overtime: 1 one-way flight from Topeka to Kansas City (3 hours)Gaines earns $14 per hour and is paid time and a half when working overtime. Fringe benefits cost the airline $2 per hour for any hour worked, regardless of whether it is a regular or overtime hour.
Monica Gaines earned $197 on August 10, working regular and overtime hours for Heartland Airways. Her regular time earnings were $112, overtime earnings were $63, and the fringe benefits cost was $22.
To calculate Monica Gaines's earnings for August 10, we need to consider her regular time and overtime hours, as well as the fringe benefits cost. Here's the breakdown:
Regular Time:
2 round-trip flights between Topeka and St. Louis (8 hours)
Overtime:
1 one-way flight from Topeka to Kansas City (3 hours)
Hourly Rate: $14 per hour
Overtime Rate:
Time and a half, which means $14 * 1.5 = $21 per hour
Fringe Benefits Cost:
$2 per hour
Now let's calculate Monica Gaines's earnings:
Regular Time Earnings:
Regular time hours: 8 hours
Hourly rate: $14 per hour
Regular time earnings: 8 hours * $14 per hour = $112
Overtime Earnings:
Overtime hours: 3 hours
Overtime rate: $21 per hour
Overtime earnings: 3 hours * $21 per hour = $63
Fringe Benefits Cost:
Total hours worked (regular time + overtime): 8 hours + 3 hours = 11 hours
Fringe benefits cost: $2 per hour
Fringe benefits cost: 11 hours * $2 per hour = $22
Total Earnings:
Regular time earnings + Overtime earnings + Fringe benefits cost
Total earnings: $112 + $63 + $22 = $197
Therefore, Monica Gaines's earnings for August 10, including
overtime, and fringe benefits, amount to $197.
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suppose you wish to invest $150,000.00 in one of the products below. you are not allowed to withdraw any of your investment or accrued interest during the life of the investment. find the future value of the products below after the second year. which product has the highest return?product 1: nominal yearly interest rate of 2.1% with simple interest applied only.product 2: nominal interest rate of 1.9% compounded continuously.product 3: nominal interest rate of 2.0% compounded monthly.
To determine which investment product has the highest return, we compare the future values of three different products after two years.
Product 1: With a simple interest rate of 2.1%, the future value after two years can be calculated by multiplying the principal ($150,000) by (1 + interest rate * time). The future value would be $150,000 * (1 + 0.021 * 2) = $156,300. Product 2: With continuous compounding at a nominal interest rate of 1.9%, the future value can be calculated using the formula FV = P * e^(interest rate * time), where e is the base of the natural logarithm. The future value would be $150,000 * e^(0.019 * 2) = $156,557.
Product 3: With monthly compounding at a nominal interest rate of 2.0%, the future value can be calculated using the formula FV = P * (1 + interest rate/compounding periods)^(compounding periods * time). In this case, compounding occurs monthly, so the future value would be $150,000 * (1 + 0.02/12)^(12 * 2) = $156,426. Comparing the future values, we find that Product 2, with continuous compounding, has the highest return after two years, resulting in a future value of $156,557.
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Circle of Influence. Complete and discuss in class Dec 7th.
How do you personally try to influence others? Think carefully about how you get others to agree with you or do something you want. Watch the way you influence others in a team, at home, or during your work. Make a list of your influence tactics:
1. ___________________________________ 2. ___________________________________ 3. ___________________________________
4. ___________________________________ 5. ___________________________________ 6. ___________________________________
Of the influence and political tactics discussed in the chapter, which ones do you typically not use?
During the next two days, your assignment is to (1) monitor the influence tactics you typically use and (2) try one new tactic that you don’t normally use.
The new influence tactic you will try is:
Another important concept is called the circle of influence. Think carefully about the people who have influence over you. These people are your circle of influence. You may have one circle of influence at work, another at home, and others for your social life or career.
Write down the people who would have some influence over you at work or school:
This is your circle of influence.
A person’s circle of influence can be important when you really want to influence that person. If someone doesn’t respond to your normal influence attempts, think about identifying the individual’s circle of influence—the people who have influence over him or her. You can then influence people in the ‘‘circle’’ as an indirect way to influence the person you want to change.
Pick an individual at work or school, and plot out that person’s circle of influence.
List the key people you believe are in the person’s circle of influence:
How would you get more information on the person’s true circle of influence?
How can you use your knowledge of the person’s circle to have influence over him or her?
What are the possible disadvantages of using this approach to influence someone?
My Influence Tactics are Using facts and data to support my argument, Engaging in active listening to understand the other person's perspective, Building rapport and relationship before attempting to influence, Using humor to break the ice and ease tension, Providing incentives or rewards for agreeing with me, Emphasizing the potential negative consequences of not agreeing with me.
Unused Tactics
I typically do not use the tactics of coercion and pressure, and I try to avoid the use of manipulation.
New Tactic to Try
I will try using storytelling as an influence tactic to connect with my audience emotionally and create a memorable message.
Circle of Influence at Work
My boss, my teammates, and the project manager are in my circle of influence at work.
Plotting Someone's Circle of Influence
I picked John as the individual at work, and the key people I believe are in his circle of influence are his direct supervisor, his mentor, his department head, and the CEO.
Getting More Information
I can get more information on the person's true circle of influence by talking to his colleagues, observing his behavior, conducting online research, and attending networking events.
Using Knowledge for Influence
I can use my knowledge of the person's circle of influence to engage and build relationships with the key people in his circle, listen to their concerns and ideas, and present my message in a way that aligns with their values and interests.
Possible Disadvantages
The possible disadvantages of using this approach to influence someone include the risk of creating conflicts or resentment if the person finds out about the indirect influence attempts, the challenge of gathering accurate information about the person's circle of influence, and the possibility of being perceived as insincere or manipulative if not executed authentically.
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which of the following could be the time to maturity on a corporation's commercial paper?group of answer choices
A. 147 days
B. 365 days
C. ten years or more
D. 294 days
The time to maturity on a corporation's commercial paper could be 147 days, 365 days, or 294 days.
The time to maturity on a corporation's commercial paper refers to the length of time until the paper reaches its maturity date. Commercial paper is a short-term debt instrument issued by corporations to meet their short-term financing needs. It typically has a maturity period ranging from a few days to a year. Among the given options, 147 days, 365 days, and 294 days fall within the typical range for commercial paper maturities. These options represent different time periods, providing flexibility for corporations to choose the maturity that aligns with their financing requirements. The specific maturity chosen depends on factors such as the company's cash flow needs, market conditions, and investor preferences.
It is worth noting that commercial paper with maturities exceeding one year, such as "ten years or more" mentioned in option C, is less common for this type of instrument. Commercial paper is primarily used for short-term financing, and longer-term debt instruments like bonds are usually issued for maturities beyond one year.
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Transformers, Inc. prepared cash estimates for the 3rd quarter of 2021 (3-months). The following estimates were developed for certain items: July September August P 80,000 P 110,000 Cash sales Credit sales P 60,000 30,000 60,000 90,000 Purchases 60,000 55,000 75,000 Payroll 20,000 25,000 35,000 Other expenses 15,000 20,000 25,000 In June, credit sales totaled P90,000 and purchases totaled P50,000. May credit sales were P120,000. Accounts receivable collections amount to 30% in the month after the sale and 60% in the second month after the sale; 10% of the receivables are never collected. Payroll and other expenses are paid in the month incurred. Seventy five percent of the purchases are paid in the month incurred and the remainder is paid in the following month. A P25,000 tax payment is due on August 30. The cash balance was P60,000 on July 1 and the company maintain a minimum cash balance of P50,000. Any deficiency in cash can be withdrawn from the credit line of the company from the bank at the beginning of the month cash is required and paid at the end of the month when funds are available. Loans will be made on a multiple of ten thousand. Interest rate of the credit line is 12% p.a. Required: 1. Prepare a cash budget for the 3-month period, July through September. Also add one column for the total of the quarter balance. 2. What is the balance of accounts receivable and accounts payable as of Sept. 31?
The balance of accounts receivable as of September 30 is P153,000, and the balance of accounts payable as of September 30 is P240,000.
What is in the cash budget?To prepare the cash budget for the 3-month period (July through September), consider the given estimates and additional information. Calculate the cash budget and determine the balance of accounts receivable and accounts payable as of September 30.
1. Cash Budget for July through September:
+--------------+--------+---------+---------+-----------+
| Category | July | August | September | Total |
+-------------+---------+------------+-----------------+-----------+
| Beg. Bal. | 60,000 | 60,000 | 66,000 | |
+-------------+-------------+------------+-------------+-----------+
| Cash Receipts | | | | |
| Cash Sales | 60,000 | 60,000 | 60,000 | 180,000 |
| Credit Sales | 30,000 | 60,000 | 90,000 | 180,000 |
| Collections | | | | |
| July Sales | | 18,000 | 36,000 | 54,000 |
| August Sales | | | 36,000 | 36,000 |
+-------------------+---------+---------+---------+-----------+
| Total Cash Inflow | 90,000 | 138,000 | 222,000 | 414,000 |
+-------------------+---------+---------+---------+-----------+
| Cash Disbursements| | | | |
| Purchases | 60,000 | 75,000 | 55,000 | 190,000 |
| Payroll | 20,000 | 25,000 | 35,000 | 80,000 |
| Other Expenses | 15,000 | 20,000 | 25,000 | 60,000 |
| Tax Payment | | 25,000 | | 25,000 |
+-------------------+---------+---------+---------+-----------+
| Total Cash Outflow| 95,000 | 145,000 | 115,000 | 355,000 |
+-------------------+---------+---------+---------+-----------+
| Net Cash Flow | -5,000 | -7,000 | 107,000 | 59,000 |
+-----------------+---------+---------+---------+-----------+
| Ending Bal. | 55,000 | 53,000 | 173,000 | |
+-----------------+-------------+-----------+------------+---------+
2. Balance of accounts receivable and accounts payable as of September 30:
To determine the balance of accounts receivable and accounts payable as of September 30, consider the credit sales, collections, and payment terms.
- Credit sales in June: P90,000
- Credit sales in July: P30,000
- Credit sales in August: P60,000
- Credit sales in September: P90,000
Collections:
- July sales collections in August: 30% of P90,000 = P27,000
- July sales collections in September: 60% of P90,000 = P54,000
- August sales collections in September: 60% of P60,000 = P36,000
- September sales collections: Not included in the calculation since we only have
the estimate for September.
Balance of accounts receivable as of September 30:
- June credit sales balance: P90,000 (uncollected)
- July credit sales balance: P30,000 (uncollected)
- August credit sales balance: P60,000 (uncollected)
- September credit sales balance: P90,000 (uncollected)
- Collections from July sales in August: P27,000
- Collections from July sales in September: P54,000
- Collections from August sales in September: P36,000
Total accounts receivable balance as of September 30:
P90,000 + P30,000 + P60,000 + P90,000 - P27,000 - P54,000 - P36,000 = P153,000
Balance of accounts payable as of September 30:
- Purchases in June: P50,000
- Purchases in July: P60,000
- Purchases in August: P75,000
- Purchases in September: P55,000
Total accounts payable balance as of September 30:
P50,000 + P60,000 + P75,000 + P55,000 = P240,000
Therefore, the balance of accounts receivable as of September 30 is P153,000, and the balance of accounts payable as of September 30 is P240,000.
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contemporary managerial accounting systems are focusing more and more on ____
Contemporary managerial accounting systems are focusing more and more on providing real-time and actionable information for decision-making.
In recent years, there has been a shift in managerial accounting systems towards a focus on providing timely and relevant information that aids decision-making processes within organizations. This shift is driven by the need for managers to make informed decisions in a dynamic and rapidly changing business environment. Contemporary managerial accounting systems are designed to provide real-time and accurate data on various aspects of the organization's operations, such as costs, revenues, and performance metrics. These systems use advanced technology and software tools to collect, analyze, and present data in a user-friendly manner. The emphasis on providing real-time information allows managers to have up-to-date insights into the financial and operational aspects of the business. This enables them to identify trends, evaluate performance, and make informed decisions promptly. Moreover, contemporary managerial accounting systems aim to provide actionable information. This means that the data presented is not only relevant but also presented in a format that allows managers to take concrete actions based on the information provided. It goes beyond just reporting historical data and focuses on providing insights that drive strategic and operational decision-making. By focusing on real-time and actionable information, contemporary managerial accounting systems help organizations improve their agility, adaptability, and overall performance in today's competitive business landscape.
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Silver Lining Inc. has a balanced scorecard with a strategy map that shows that delivery time and the number of erroneous shipments are expected to affect the company’s ability to satisfy the customer. Further, the strategy map for the balanced scorecard shows that the hours from ordered to delivered affects the percentage of customers who shop again, and the number of erroneous shipments affects the online customer satisfaction rating. The following information is also available:
The company’s target hours from ordered to delivered is 40.
Every hour over the ordered-to-delivered target results in a 0.5% decrease in the percentage of customers who shop again.
The company’s target number of erroneous shipments per year is no more than 65.
Every error over the erroneous shipments target results in a 0.5 point decrease in the online customer satisfaction rating and an added future financial loss of $500.
The company estimates that for every 1% decrease in the percentage of customers who shop again, future profit decreases by $4,000 and market share decreases by 0.3%.
The company also estimates that for every 1 point decrease in the overall online customer satisfaction rating (on a scale of 1 to 10), future profit decreases by $3,000 and market share decreases by 0.6%.
The company should focus on reducing delivery time and minimizing erroneous shipments to improve customer satisfaction.
Failure to meet targets results in decreased repeat customers, lower satisfaction ratings, and negative financial impacts. Decreases in customer satisfaction and repeat customers lead to reduced future profits and market share. Exceeding targets incurs additional financial losses. Improving delivery time and reducing errors will positively impact customer satisfaction, future profits, and market share.
To ensure customer satisfaction, Silver Lining Inc. has identified two key factors: delivery time and erroneous shipments. The company's balanced scorecard strategy map indicates that these factors directly affect customer satisfaction. Specifically, the time taken from order to delivery impacts the percentage of customers who shop again, while the number of erroneous shipments influences the online customer satisfaction rating.
To elaborate, Silver Lining Inc. has set a target delivery time of 40 hours. However, any delay beyond this target results in a 0.5% decrease in the percentage of customers who choose to shop with the company again. This decrease has a subsequent negative impact on future profit, leading to a decrease of $4,000 and a decline in market share by 0.3% for every 1% reduction in repeat customers.
Similarly, the company has set a target of no more than 65 erroneous shipments per year. Any excess errors above this target lead to a 0.5 point decrease in the online customer satisfaction rating and an additional future financial loss of $500. Furthermore, for every 1 point decrease in the overall online customer satisfaction rating, there is a future profit decrease of $3,000 and a decline in market share by 0.6%.
Therefore, it is crucial for Silver Lining Inc. to focus on reducing delivery time and minimizing erroneous shipments. By meeting or surpassing the targets, the company can improve customer satisfaction, leading to increased repeat customers, higher satisfaction ratings, and positive impacts on future profits and market share. Failure to meet the targets not only negatively affects customer satisfaction but also results in financial losses and reduced market competitiveness.
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Machinery was purchased on January 1 for $67,130. The machinery has an estimated life of seven years and an estimated salvage value of $9,000. Double-declining plance depreciation for the second year (rounded to the nearest dollar) would be
The double-declining balance depreciation for the second year, rounded to the nearest dollar, would be $14,375.
Double-declining balance depreciation is an accelerated depreciation method that allows for higher depreciation expenses in the earlier years of an asset's life. To calculate the double-declining balance depreciation, we need to determine the depreciation rate and apply it to the asset's initial cost.
The depreciation rate for double-declining balance depreciation is calculated as follows:
Depreciation Rate = (1 / Useful Life) × 2
In this case, the machinery has an estimated life of seven years. Therefore, the depreciation rate is:
Depreciation Rate = (1 / 7) × 2 = 2 / 7
To calculate the depreciation expense for the second year, we multiply the depreciation rate by the remaining book value after the first year of depreciation. The book value after the first year is the initial cost minus the depreciation expense for the first year.
Depreciation Expense (Year 2) = Depreciation Rate × (Initial Cost - Depreciation Expense Year 1)
Depreciation Expense (Year 1) is calculated as:
Depreciation Expense (Year 1) = Initial Cost - Salvage Value / Useful Life
Depreciation Expense (Year 1) = $67,130 - $9,000 / 7 ≈ $8,733.33
Therefore, the depreciation expense for the second year, rounded to the nearest dollar, would be:
Depreciation Expense (Year 2) ≈ (2 / 7) × ($67,130 - $8,733.33) ≈ $14,375
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They are used to find differences between years or compare numbers between yearsaudited and previous yearsa. control testsb. Substantive evidence of transactionsc. risk testsd. Analytical tests or procedurese. Substantive balance sheet tests
Analytical tests or procedures are used to find differences between years or compare numbers between audited years and previous years. They help auditors assess the reasonableness and reliability of financial information.
Analytical tests or procedures are an essential part of the auditing process. They involve evaluating financial information by comparing current year data with prior year data or industry benchmarks. Here is a stepwise explanation of analytical tests or procedures:
1. Identify the objective: The first step is to determine the objective of the analytical tests. This could involve identifying significant fluctuations or trends in financial data, assessing the reasonableness of account balances, or comparing financial ratios with industry averages.
2. Select appropriate data: Auditors need to gather relevant financial data for the analysis. This includes financial statements, general ledger information, budget reports, and industry benchmarks. The data should cover multiple periods for meaningful comparisons.
3. Develop expectations: Based on the data collected, auditors develop expectations of what the financial information should look like. These expectations can be derived from historical trends, industry standards, or mathematical models.
4. Compare actual results with expectations: Auditors compare the actual financial results with their expectations. Significant differences or anomalies are identified for further investigation.
5. Investigate significant variances: If there are significant variances between the actual results and expectations, auditors perform additional procedures to understand the reasons behind the differences. This may involve conducting interviews, examining supporting documentation, or performing additional tests.
6. Evaluate the reasonableness of financial information: Based on the results of the analytical tests, auditors assess the reasonableness and reliability of the financial information. They consider whether the variances are adequately explained, if there are any potential misstatements or errors, and the overall impact on the financial statements.
Analytical tests or procedures provide valuable insights into the financial health of a company and help auditors form their opinions on the accuracy and fairness of the financial statements.
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explain stock price formation through market mirco structuretheory.
Stock price formation is a complex process influenced by various factors, including market microstructure theory.
Market microstructure theory focuses on understanding how the structure and functioning of financial markets affect price formation and trading activities. It examines the role of market participants, market rules, and the trading environment in shaping stock .
Market microstructure theory considers several key elements that influence stock price formation:
1. Market Participants: Market participants, including investors, traders, and market makers, play a crucial role in price discovery. Their trading decisions and actions are driven by various factors such as information, expectations, and trading strategies. The interactions between different market participants affect the supply and demand dynamics, leading to price changes.
2. Order Flow and Liquidity: Order flow represents the buying and selling interest in a particular stock. The order flow affects the liquidity of the market, with higher liquidity leading to tighter bid-ask spreads and efficient price discovery. Market microstructure theory explores the impact of order flow on price movements and how liquidity provision influences the formation of stock prices.
3. Bid-Ask Spread: The bid-ask spread is the difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller is willing to accept (ask). The bid-ask spread reflects the cost of executing trades and provides a measure of market liquidity. Inefficient markets with wider spreads can result in slower price adjustments compared to more liquid markets.
4. Market Depth: Market depth refers to the quantity of shares available at various price levels in the order book. Deeper markets with higher liquidity tend to facilitate price discovery and reduce the impact of large trades on prices. Market microstructure theory analyzes the relationship between market depth and price formation.
5. Information Flow: Information plays a vital role in stock price formation. Market microstructure theory investigates how the arrival and dissemination of information affect trading decisions and price adjustments. As new information becomes available, market participants revise their expectations, leading to changes in stock prices.
6. Market Regulations: Regulatory frameworks and market rules have a significant impact on stock price formation. Regulations aim to promote fair trading practices, transparency, and investor protection. Market microstructure theory studies the influence of regulations on market efficiency, liquidity, and price discovery.
Market microstructure theory provides insights into how the above factors interact to determine stock prices. It helps explain phenomena such as price volatility, price discovery, market liquidity, and the impact of trading mechanisms on price formation. By understanding market microstructure, investors and market participants can make more informed trading decisions and develop effective strategies in response to changing market conditions.
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T/F: in the event of a successful speculative attack, foreign investors tend to suffer because mexican businesses are less able to pay their foreign debts.
False. In the event of a successful speculative attack, foreign investors tend to suffer because mexican businesses are less able to pay their foreign debts.
In the event of a successful speculative attack, foreign investors tend to benefit rather than suffer. A speculative attack occurs when investors sell a country's currency due to the belief that its value will depreciate. If the attack is successful and the currency depreciates, foreign investors holding that currency can convert it back to their own currency at a higher exchange rate, resulting in profits for them.
However, Mexican businesses may indeed face challenges in repaying their foreign debts due to the depreciation of their currency, which makes their debt obligations relatively more expensive.
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your business has just taken out a 1-year installment loan for $72,500 at a nominal rate of 11.0% but with equal end-of-month payments. what percentage of the 2nd monthly payment will go toward the repayment of principal? a. 77.55% b. 90.45% c. 81.63% d. 85.93% e. 73.67%
Answer:
90.45%
Explanation:
We will be solving this problem by using a formula that gives us the monthly payment installments on a loan, with other supporting equations.
We are given,
Principal = $72,500
Nominal Rate = 11.0%
Duration = 1 year
The monthly interest rate can be calculated as follows.
Monthly Interest = (11 /12) = 0.917%
For calculating equal installment payments on the loan, we use
Installment Amount = Principal / Present V. A Factor
V.A - Value Annuity
Present V.A = (1 - (1 + r)^(-n)) / r
where
r = monthly interest rate
n = number of payments
For the 1-year duration mentioned in the question, the number of total payments would be 12.
Thus, the present V.A would be
Present V.A Factor = (1 - (1 + 0.00917)^(-12)) / 0.00917
Present V.A Factor = 10.63
Therefore, the monthly installment amount is:
Installment amount = 72,500 / 10.63
Installment amount = $6,820.31
Finding a portion of the second monthly payment allocated,
Interest portion = Principal * Interest rate
Interest portion = 72,500 * 0.00917
Interest portion = $665.22
The principal portion of the second-month payment is
$6,820.31 - $665.22 = $6,155.09.
Percentage of 2nd monthly payment for principal = (6,155.09 / 6,820.31) * 100
Percentage of 2nd monthly payment for principal = 90.45%
Therefore, the percentage of the 2nd Monthly payment which goes towards loan repayment will be 90.45%
if a corporation issues 5,000 shares of $5 par value common stock for $85,000, the journal entry would include a credit to:
The journal entry for the issuance of 5,000 shares of $5 par value common stock for $85,000 would include a credit to:
Common Stock: The credit would be made to the Common Stock account. Common Stock represents the portion of the company's equity that is allocated to the common shareholders. The credit entry would reflect the increase in the equity of the company due to the issuance of common stock.
The journal entry would typically be recorded as follows:
Debit: Cash (or the appropriate cash account) - $85,000
Credit: Common Stock - $25,000 ($5 par value * 5,000 shares)
When a corporation issues common stock, it receives cash or other assets in exchange for ownership shares in the company. The credit to Common Stock represents the increase in the company's equity resulting from the issuance of shares. The amount credited to Common Stock is determined by multiplying the par value per share by the number of shares issued.
The journal entry for the issuance of common stock would include a credit to the Common Stock account, reflecting the increase in equity resulting from the issuance of shares.
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Incorrect 0/4 pts Question 3 A 10-year bond pays an annual coupon, its YTM is 8%, and it currently trades at a premium. Which of the following statements is CORRECT? The bond's coupon rate is less than 8%. If the yield to maturity increases, then the bond's price will increase. If the yield to maturity remains at 8%, then the bond's price will decline over the next year. The bond's current yield is less than 8%.
The bond's coupon rate is greater than 8%, A bond that trades at a premium means that its price is higher than its par value.
This can happen when the bond's yield to maturity (YTM) is lower than its coupon rate. In this case, the bond's coupon rate must be greater than 8%, because if it were less than 8%, the bond's YTM would be higher than 8% and the bond would trade at a discount.
Here is a more detailed explanation of how the relationship between yield to maturity, coupon rate, and price works:
Yield to maturity (YTM) is the interest rate that a bondholder earns if they hold the bond until maturity and receive all of the scheduled coupon payments and the par value at maturity.
Coupon rate is the interest rate that the bond issuer pays to the bondholders on a regular basis, typically every six months. Price is the amount that an investor pays to buy a bond.
The price of a bond is determined by the market, and it is based on the bond's YTM, coupon rate, and maturity date. If the YTM is lower than the coupon rate, then the bond will trade at a premium.
This is because investors are willing to pay more than the par value for the bond because they are earning a higher interest rate than they could earn on other investments with similar risk.
Conversely, if the YTM is higher than the coupon rate, then the bond will trade at a discount. This is because investors are not willing to pay more than the par value for the bond because they are earning a lower interest rate than they could earn on other investments with similar risk.
In the case of a 10-year bond that pays an annual coupon, its YTM is 8%, and it currently trades at a premium, the only possible explanation is that the bond's coupon rate is greater than 8%.
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i. Explain the accounting treatment for the following in line with the provision IPSAS a. Assets received by the Government of Ghana as a gift from the USA Government in the fight against COVID-19b. Intelligence support provided by the USA government in the prevention of terrorism in Ghanac. The payment of dividend by Ghana Commercial Bank (a bank with Government as majority shareholder) ii. Compare and contrast the following terms as used in public sector accountinga. Cash Basis of Accounting and Accrual Basis of Accountingb. Appropriation Accounting and commitment accounting
cash basis accounting recognizes revenues and expenses based on cash flows, while accrual basis accounting recognizes them based on economic activity. Appropriation accounting focuses on budgetary control, while commitment accounting tracks obligations and commitments made for future expenditures.
i. Accounting treatment for the following in line with the provision of IPSAS:
a. Assets received by the Government of Ghana as a gift from the USA Government in the fight against COVID-19:
According to IPSAS, when the government receives assets as a gift, they should be recognized as revenue at fair value when the government obtains control over the assets. The fair value of the assets received should be determined based on their current market value. The government should also disclose the nature and value of the assets received in the financial statements.
b. Intelligence support provided by the USA government in the prevention of terrorism in Ghana:
IPSAS does not specifically address the accounting treatment for intelligence support. However, if intelligence support can be measured reliably and its future economic benefits are expected, it may be recognized as an intangible asset. Alternatively, it may be treated as an expense in the period it is incurred, depending on the specific circumstances and judgment of the government.
c. The payment of dividends by Ghana Commercial Bank (a bank with the Government as a majority shareholder):
When a government-owned entity like Ghana Commercial Bank pays dividends, IPSAS requires the government to recognize the dividend income in its financial statements when it has the right to receive the dividend and the amount can be measured reliably. The dividend income should be recognized in the period in which the bank's shareholders' meeting approves the dividend distribution.
ii. Comparison and contrast of the following terms as used in public sector accounting:
a. Cash Basis of Accounting and Accrual Basis of Accounting:
- Cash Basis of Accounting: Under cash basis accounting, revenues and expenses are recognized when cash is received or paid. It does not take into account when the economic activity occurs.
- Accrual Basis of Accounting: Under accrual basis accounting, revenues and expenses are recognized when they are earned or incurred, regardless of when cash is received or paid. It reflects the economic activity of an entity more accurately.
b. Appropriation Accounting and Commitment Accounting:
- Appropriation Accounting: Appropriation accounting is used to control and report on the expenditure of funds that have been legally authorized for specific purposes. It focuses on the budgetary control of funds and ensures that expenditures are within the approved appropriations.
- Commitment Accounting: Commitment accounting tracks and reports on the obligations or commitments made for future expenditures, even if the actual expenditure has not yet occurred. It helps in monitoring and controlling the commitments made against available budgetary resources.
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