The correct answer is 4. none of the above. The choice between NPV and MIRR depends on the specific characteristics of the projects, such as their risk levels, cash flows, and investment constraints.
Net Present Value (NPV) and Modified Internal Rate of Return (MIRR) are both commonly used financial metrics in investment analysis, but they serve different purposes and have different advantages in specific scenarios. Therefore, it is not accurate to say that NPV is preferred over MIRR or vice versa based on the given options.
1. If the projects are mutually exclusive and are of different risks:
In this case, the selection of projects is based on comparing their profitability and risk levels. NPV is a suitable metric as it considers the time value of money and provides a measure of the project's profitability by discounting cash flows to their present value. MIRR, on the other hand, is more focused on the internal rate of return and may not adequately account for different risk levels. Therefore, NPV would be more appropriate in this situation.
2. Limited capital:
Limited capital refers to a situation where there are constraints on the amount of available investment funds. In such cases, the decision-making process may involve selecting projects that maximize the return on investment within the available capital. Both NPV and MIRR can be used in this scenario. NPV helps in determining the value created by each project relative to its cost, while MIRR provides a measure of the project's return adjusted for the cost of capital. Both metrics can aid in making informed decisions regarding the allocation of limited capital.
3. If the projects have the same outlay and same risk:
When projects have identical initial costs and risk levels, NPV and MIRR should yield the same decision. This is because both metrics consider the same cash flows and discount rate. In such cases, using either NPV or MIRR would lead to the same conclusion.
In summary, neither NPV nor MIRR is exclusively preferred over the other in all situations. It is essential to consider these factors and evaluate the suitability of each metric based on the specific investment analysis scenario.
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IBM Paid $2.3 Dividend Per Share. The Number Of Outstanding Shares Is 10,000,000 Shares. Compute The Total Cash Outflow With Dividend Payment.
IBM paid $2.3 dividend per share. The number of outstanding shares is 10,000,000 shares. Compute the total cash outflow with dividend payment.
The total cash outflow with dividend payment is $23,000,000
The total cash outflow with dividend payment can be calculated using the formula:
Total cash outflow = dividend per share x number of outstanding shares
Given that the dividend per share is $2.3 and the number of outstanding shares is 10,000,000 shares, we can substitute these values in the above formula to get:
Total cash outflow = $2.3 x 10,000,000
Total cash outflow = $23,000,000
Therefore, the total cash outflow with dividend payment is $23,000,000.
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EXPLAIN FIVE REASONS WHY EXPERIENCE CURVE PRICING IS IDEAL
STRATEGIC TOOL TO ENTER THE CHADIAN MARKET
Experience curve pricing refers to the process of setting prices for goods based on the experience that a manufacturer has accumulated. It is considered an ideal strategic tool to enter the Chadian market for the following reasons:
1. Attracts customers: Experience curve pricing is ideal for attracting customers to new products in a highly competitive market, such as the Chadian market. It's because the pricing strategy encourages customers to try out new goods by offering lower prices, resulting in increased sales.
2. Increased production efficiency: The adoption of the experience curve pricing system leads to an increase in production efficiency, which translates into lower production costs. The lowered production costs are then passed down to the customer, who enjoys cheaper products, resulting in higher sales volumes.
3. Cost advantage: One of the primary reasons to use the experience curve pricing system is to benefit from a cost advantage. Cost advantage occurs when the manufacturer produces products at a lower cost than the competitors, resulting in higher profit margins and market domination.
4. Increased profitability: The lower production costs that experience curve pricing enables translate into higher profitability, making it an ideal tool to enter the Chad market. Higher profitability ensures that the manufacturer can compete effectively in the market and secure a foothold to expand into other neighboring countries.
5. Sustained growth: The adoption of the experience curve pricing system enables manufacturers to maintain sustained growth by continuing to scale up production to meet demand. This ensures that the company stays ahead of the competition while providing goods at affordable prices to consumers in the Chadian market.
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When flowcharting the supply chain network, which step involves limiting the number of entities to be included in the supply chain map? A. Move and reposition nodes and links as needed. B. Place and fill nodes and links—special attention to up and downstream critical players. C. Place and fill nodes and links—special attention to up and downstream critical players. D. Node and link specification—icon selection, information depth, aggregation decisions, key business process integration, information to display, and key metrics to include. E. Disseminate/publish "as-is" map
The step that involves limiting the number of entities to be included in the supply chain map when flowcharting the supply chain network is D.
Node and link specification—icon selection, information depth, aggregation decisions, key business process integration, information to display, and key metrics to include. A supply chain map is a flowchart that graphically represents a company's supply chain, including suppliers, customers, and other related entities.
When creating a supply chain map, it is important to restrict the number of entities included to prevent the flowchart from being too complicated, which can make it difficult to read and comprehend.
Node and link specification involves selecting icons, deciding on the depth of information, deciding on aggregation choices, integrating key business processes, determining what information to show, and deciding on key metrics to incorporate into the supply chain map.
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A project requires an initial investment of $8 million, and is anticipated to generate a single cash flow of $15 million in 2 years. What is the internal rate of return on the project?
The internal rate of return (IRR) on the project is approximately 38.73%. This means that the project's rate of return is 38.73% over the investment period, making it an attractive investment opportunity.
To calculate the internal rate of return, we need to find the discount rate at which the present value of the cash flow equals the initial investment. In this case, the initial investment is $8 million, and the single cash flow in 2 years is $15 million.
Using a financial calculator or spreadsheet software, we can solve for the discount rate (IRR) that satisfies the equation:
$8 million = $15 million / (1 + IRR)^2
By solving this equation, we find that the IRR is approximately 38.73%.
The internal rate of return (IRR) on the project is 38.73%. The IRR represents the discount rate that makes the project's net present value zero, indicating that the project's cash inflows are sufficient to cover the initial investment and generate a positive return.
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Which is not program?
Select one: a. All b. Dubai Expo 2020 c. UAE Golden Visa d. My Dream Home e. None f. Dubai Rail Metro
The option that is not a program is "d. My Dream Home."
Programs are typically organized initiatives or activities designed to achieve specific objectives or outcomes.
a. "All" is not a specific program; it is a generic term that refers to everything or the entire set of options.
b. "Dubai Expo 2020" is a well-known event that involves various programs and activities.
c. "UAE Golden Visa" refers to a specific program initiated by the UAE government to grant long-term residency to eligible individuals.
d. "My Dream Home" does not specify a program; it appears to be a personal aspiration or desire, rather than an organized initiative.
e. "None" is not a program; it indicates the absence of any specific program.
f. "Dubai Rail Metro" is a program that refers to the extensive metro system in Dubai, which includes multiple lines and stations.
Therefore, "d. My Dream Home" is the option that is not a program.
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Related to Checkpoint 9.3) (Bond valuation) Pybus, Inc. is considering issuing bonds that will mature in 23 years with an annual coupon rate of 8 percent. Their par value will be $1,000, and the interest will be paid semiannually. Pybus is hoping to get a AA rating on its bonds and, if it does, the yield to maturity on similar AA bonds is 12 percent. However, Pybus is not sure whether the new bonds will receive a AA rating. If they receive an A rating, the yield to maturity on similar A bonds is 13 percent. What will be the price of these bonds if they receive either an A or a AA rating?
a. The price of the Pybus bonds if they receive a AA rating will be $ (Round to the nearest cent.)
The price of the Pybus bonds if they receive a AA rating will be $624.31 and the price of the Pybus bonds if they receive an A rating will be $582.32.
Related to Checkpoint 9.3) (Bond valuation)Pybus, Inc. is considering issuing bonds that will mature in 23 years with an annual coupon rate of 8 percent. Their par value will be $1,000, and the interest will be paid semiannually. Pybus is hoping to get a AA rating on its bonds and, if it does, the yield to maturity on similar AA bonds is 12 percent. However, Pybus is not sure whether the new bonds will receive a AA rating. If they receive an A rating, the yield to maturity on similar A bonds is 13 percent. Given data; Par value = $1,000Annual coupon rate = 8%Payment = Semiannually Maturity period = 23 yearsPrice of the Pybus bonds if they receive a AA rating; The yield to maturity on similar AA bonds is 12 percent, so we can calculate the bond's price using the following formula;P = C * [1 - (1 / (1 + r / n)^(n*t))] / (r / n) Where;C = Annual coupon rate * Par value / number of payments per yearr = Yield to maturityn = Number of payments per yeart = Maturity period in yearsAs given above, C = 0.08 * $1,000 / 2 = $40, r = 12%, n = 2, and t = 23 years.P = $40 * [1 - (1 / (1 + 0.12 / 2)^(2*23))] / (0.12 / 2)≈ $624.31The price of the Pybus bonds if they receive an A rating will be;The yield to maturity on similar A bonds is 13 percent, so we can calculate the bond's price using the same formula as above.P = $40 * [1 - (1 / (1 + 0.13 / 2)^(2*23))] / (0.13 / 2)≈ $582.32.
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Assume you are considering two projects, Stock A and Stock B, for which the following estimated data have been made available in Table 1: i) Calculate the expected rate of return, [E(NPV)] for both the projects. ii) Calculate the standard deviation, (o) for both the projects. iii) Find the Coefficient of Variation (CV) for both projects and discuss which project is a better investment. iv) Find the Semi- Variance (SV) and Semi Standard Deviation (SSD) for both projects and discuss which project is a better investment. Your answer Table 1: for question no. 2 Probability Possible NPV of B 1 0.30 800 2 0.25 1100 3 0.20 1500 4 0.25 900 Possible NPV of A 1000 1200 1400 1600
Comparing the coefficient of variation (CV) for both projects, we can see that project A has a lower CV (11.26%) compared to project B (29.72%). A lower CV indicates less risk per unit of return. Therefore, based on the coefficient of variation, project A is a better investment option.
To calculate the expected rate of return [E(NPV)] for both projects A and B, we need to multiply the possible NPV values by their respective probabilities and sum them up.
For project A:
[E(NPV)] = (0.30 * 1000) + (0.25 * 1200) + (0.20 * 1400) + (0.25 * 1600)
= 300 + 300 + 280 + 400
= 1280
For project B:
[E(NPV)] = (0.30 * 800) + (0.25 * 1100) + (0.20 * 1500) + (0.25 * 900)
= 240 + 275 + 300 + 225
= 1040
Next, we calculate the standard deviation (σ) for both projects. To do this, we first need to calculate the variance.
For project A:
Variance of A = [(1000 - 1280)^2 * 0.30] + [(1200 - 1280)^2 * 0.25] + [(1400 - 1280)^2 * 0.20] + [(1600 - 1280)^2 * 0.25]
= (25600 * 0.30) + (6400 * 0.25) + (25600 * 0.20) + (25600 * 0.25)
= 7680 + 1600 + 5120 + 6400
= 20800
For project B:
Variance of B = [(800 - 1040)^2 * 0.30] + [(1100 - 1040)^2 * 0.25] + [(1500 - 1040)^2 * 0.20] + [(900 - 1040)^2 * 0.25]
= (44100 * 0.30) + (3600 * 0.25) + (184900 * 0.20) + (176400 * 0.25)
= 13230 + 900 + 36980 + 44100
= 95310
Now, we can calculate the standard deviation:
Standard deviation (σ) = √Variance
For project A:
σ(A) = √20800
= 144.14
For project B:
σ(B) = √95310
= 308.97
To find the coefficient of variation (CV), we divide the standard deviation by the expected return and multiply by 100.
For project A:
CV(A) = (σ(A) / [E(NPV)]) * 100
= (144.14 / 1280) * 100
= 11.26%
For project B:
CV(B) = (σ(B) / [E(NPV)]) * 100
= (308.97 / 1040) * 100
= 29.72%
Next, let's calculate the semi-variance (SV) and semi-standard deviation (SSD) for both projects. Semi-variance considers only the negative deviations from the expected return.
For project A:
SV(A) = [(1000 - 1280)^2 * 0.30]
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What's a shipper account application? AO A packet of information that you give to potential clients. BO A request from a consignee to do business with you. CO Written permission from a potential client so you can perform a credit check on them. A form that allows you to begin work with a transportation attorney.
A shipper account application is a written permission from a potential client that allows you to perform a credit check on them.
A shipper account application is a document or form that is typically provided by a logistics or transportation company to potential clients who are interested in shipping goods or utilizing their transportation services. The purpose of this application is to gather necessary information from the potential client and obtain their permission to perform a credit check.
By obtaining written permission through the shipper account application, the logistics or transportation company can evaluate the creditworthiness of the potential client. This credit check helps the company assess the financial stability and reliability of the client before entering into a business relationship. It allows the company to determine the client's ability to pay for the shipping or transportation services and helps mitigate the risk of non-payment or financial issues.
The shipper account application typically includes information such as the client's name, contact details, business information, and may require additional financial details or references. Once the application is submitted and the credit check is performed, the logistics or transportation company can decide whether to approve the client's request for their services.
A shipper account application is a document that seeks written permission from a potential client to perform a credit check. It is an essential step in the process of evaluating a client's creditworthiness and financial stability before establishing a business relationship with a logistics or transportation company. By obtaining this permission, the company can assess the risk involved in providing services to the client and make informed decisions regarding credit terms and service agreements.
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Dog Up! Franks is looking at a new sausage system with an installed cost of $385,000 that will last for five years. This cost will be depreciated using 100 percent bonus depreciation in the first year. At the end of the project, the sausage system can be scrapped for $60,000. The sausage system will save the firm $135,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $35,000. If the tax rate is 21 percent and the discount rate is 10 percent, what is the NPV of this project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
The main answer is:The NPV of the project is $160,723.82.
To calculate the NPV of the project, we need to determine the cash flows associated with the project over its five-year lifespan and discount them to their present value.
In the first year, there is a depreciation tax shield due to the 100 percent bonus depreciation. The depreciation expense is equal to the installed cost of $385,000. The tax shield is calculated by multiplying the depreciation expense by the tax rate, which in this case is 21 percent:
Tax Shield = Depreciation Expense * Tax Rate
= $385,000 * 0.21
= $80,850
The cash inflows from the pretax operating cost savings are $135,000 per year for five years:
Cash Inflows = Operating Cost Savings = $135,000 * 5
= $675,000
The cash outflows include the initial investment in net working capital of $35,000 and the salvage value of the sausage system of $60,000 at the end of the project.
To calculate the NPV, we discount each cash flow to its present value using the discount rate of 10 percent:
Year 0: -$385,000 (initial investment)
Year 1: $80,850 (tax shield) + $135,000 (operating cost savings)
Year 2-5: $135,000 (operating cost savings)
Year 5: $135,000 (operating cost savings) + $60,000 (salvage value)
Calculating the present value of each cash flow and summing them up, we find that the NPV of the project is $160,723.82. This positive NPV suggests that the project is expected to generate a return higher than the required rate of return (discount rate) of 10 percent and is potentially a profitable investment for Dog Up! Franks.
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Why is time-to-market so important in the apparel industry? How
does it impact supply chain processes? What are your
recommendations to utilize a better logistics strategy?
Time-to-market is critical in the apparel industry since it enables brands and retailers to take advantage of consumer demand and rapidly changing fashion trends, gain a competitive advantage, and maximize profitability.
It impact supply chain processes in the following ways: Product Development, Production,
Logistics and Transportation, Recommendations to utilize a better logistics strategy: Collaboration, Technology, Risk management.
Product Development - Design, materials sourcing, and manufacturing are all factors that impact the speed of time-to-market. A more rapid supply chain requires quick response times to changing consumer demands and trends. It is necessary to streamline the product development process to increase speed and efficiency.
Production - The apparel industry's production and manufacturing process is also essential to time-to-market. Because of the fashion industry's seasonality, the apparel industry has to produce items in vast quantities in a short period.
Logistics and Transportation - Timely logistics and transportation are essential components of the apparel supply chain. They should be implemented strategically to optimize delivery times, minimize costs, and minimize errors.
Recommendations to utilize a better logistics strategy: Implementing the following recommendations will help to utilize a better logistics strategy:
Collaboration - Collaboration between logistics service providers and manufacturers will ensure a more effective supply chain. Communication and transparency should be enhanced by ensuring that all parties have access to data in real-time.
Technology - Technology can help optimize supply chain operations by providing real-time data, inventory tracking, and forecasting. Machine learning can help to predict customer demand and inform production and supply chain decisions to enhance efficiency and speed.
Risk management - Implementing risk management strategies will enable apparel companies to address supply chain disruption proactively. Risk management could include inventory optimization, vendor selection, and planning for contingencies and disruptions.
The apparel industry is competitive, and companies must respond to the changing demands of their customers to maintain their competitiveness. Streamlining supply chain processes and reducing time-to-market is critical to success in this industry.
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Beckman Engineering and Associates (BEA) is considering a change in its capital structure. BEA currently has $20 million in debt carrying a rate of 7%, and its stock price is $40 per share with 2 million shares outstanding. BEA is a zero-growth firm and pays out all of its earnings as dividends. The firm's EBIT is $13 million, and it faces a 25% federal-plus-state tax rate. The market risk premium is 4%, and the risk-free rate is 6%. BEA is considering increasing its debt level to a capital structure with 50% debt, based on market values, and repurchasing shares with the extra money that it borrows. BEA will have to retire the old debt in order to issue new debt, and the rate on the new debt will be 9%. BEA has a beta of 0.8.
What is BEA's unlevered beta? Use market value D/S (which is the same as wd/ws) when unlevering. Do not round intermediate calculations. Round your answer to two decimal places.
What are BEA's new beta and cost of equity if it has 50% debt? Do not round intermediate calculations. Round your answers to two decimal places.
Beta:
Cost of equity: %
What is BEA's WACC with 50% debt? Do not round intermediate calculations. Round your answer to two decimal places.
%
What is the total value of the firm with 50% debt? Do not round intermediate calculations. Enter your answer in millions. For example, an answer of $1.234 million should be entered as 1.234, not 1,234,000. Round your answer to three decimal places.
$ million
Unlevered Beta: 0.6867, New Beta: 0.9155, Cost of Equity: 9.66%, WACC with 50% debt: 6.67%, Total Value with 50% debt: $62.000 million (rounded to three decimal places).
To calculate the answers, we need to follow these steps:
1) Calculate the current levered beta (βL):
- βL = βU * (1 + (1 - Tax Rate) * Debt/Equity)
2) Calculate the unlevered beta (βU):
- βU = βL / (1 + (1 - Tax Rate) * Debt/Equity)
3) Calculate the new beta with 50% debt:
- New Beta = βU * (1 + (1 - Tax Rate) * Debt/Equity)
4) Calculate the cost of equity with 50% debt:
- Cost of Equity = Risk-Free Rate + New Beta * Market Risk Premium
5) Calculate the WACC with 50% debt:
- WACC = (Cost of Equity * Equity / Total Value) + (Cost of Debt * Debt / Total Value)
6) Calculate the total value of the firm with 50% debt:
- Total Value = Equity + Debt
Perform the calculations using the given values to determine the unlevered beta, new beta, cost of equity, WACC with 50% debt, and total value with 50% debt.
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Theoretical Study In this part, you will need to discuss a relevant HR or OB topic or concept from the chapters ( not the chapter) we have covered such as diversity issues in HR, recruitment and selection issues, training, attitudes, motivation, teamwork, , etc.
Your discussion will be based on a theoretical literature review on the relevant management topic you choose. Your instructor may suggest more topics to you.
To do so, you will need to
• Research the topic by locating and reading two articles dealing with the topic you chose.
• Read, comprehend and synthesize the articles chosen and integrate or summarize each the topic in 2-3 pages. Include the link to or a copy of the articles in your final document.
• Write your report on what you have learned from reading these articles, using your own words with proper referencing/documentation techniques as explained by your instructor.
Recruitment is an essential activity for any organization since it ensures that it employs the right people. It is a key HR function that involves attracting and selecting the right candidates for vacant positions within an organization. Recruitment and selection are crucial in ensuring that an organization has the right people in the right positions.
In conclusion, recruitment and selection are crucial in ensuring that an organization has the right people in the right positions. An effective recruitment strategy should be able to attract qualified candidates and provide a positive candidate experience. The recruitment process is complex, and organizations must ensure that they develop recruitment strategies that are effective in attracting and selecting the best candidates for their vacant positions. Organizations must develop recruitment strategies that are effective in attracting and selecting the best candidates for their vacant positions.
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Define the terms "ethics" and "corporate social responsibility"
. Identify the various conscious efforts made by Starbucks to be a socially responsible company and conduct business in an ethical manner.
Ethics refers to moral principles and values that are generally accepted by society as being right. Ethics is concerned with what is right and wrong, good and evil, and moral duty and obligation.
Corporate Social Responsibility Corporate social responsibility is a business model that takes into account a company's impact on society and the environment, as well as its financial performance. It is concerned with how a company can use its resources to make a positive contribution to society .Starbucks' conscious efforts to be a socially responsible company and conduct business in an ethical manner includes the following:
Ethical SourcingStarbucks sources its coffee from farmers who meet the company's ethical sourcing standards. These standards ensure that farmers are paid a fair price for their coffee, that they use sustainable farming practices, and that they are treated ethically.
Community InvolvementStarbucks supports the communities in which it operates by donating a portion of its profits to local charities and organizations. It also encourages its employees to volunteer their time and resources to these organizations.
Environmental Stewardship Starbucks is committed to reducing its environmental impact by using renewable energy sources, recycling its waste, and reducing water usage.
Ethical Employment Practices Starbucks is committed to treating its employees fairly and ethically. It offers competitive wages, benefits, and opportunities for career advancement. It also promotes diversity and inclusion in the workplace
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Mikhail and Stefan are both artists who can create sculptures or paintings each day. The following table describes their maximum outputs per day. Use this table to answer the following questions. Sculptures Paintings Mikhail 10 5 Stefan 6 2 Based on the table, does Mikhail or Stefan have a comparative advantage? Yes, Mikhail has a comparative advantage in paintings, and Stefan has a comparative advantage in sculptures. No, neither has a comparative advantage. Yes, Mikhail has a comparative advantage in both sculptures and paintings. Yes, Mikhail has a comparative advantage in sculptures, and Stefan has a comparative advantage in paintings. Yes, Stefan has a comparative advantage in both sculptures and paintings.
Yes, Mikhail has a comparative advantage in paintings, and Stefan has a comparative advantage in sculptures.
Comparative advantage refers to the ability of an individual or entity to produce a good or service at a lower opportunity cost than others. In this case, we compare the maximum outputs per day of sculptures and paintings for Mikhail and Stefan.
Mikhail can produce up to 10 sculptures or 5 paintings per day, while Stefan can produce up to 6 sculptures or 2 paintings per day.
To determine comparative advantage, we look at the opportunity cost of producing one unit of a good in terms of the other good.
For Mikhail, the opportunity cost of producing one painting is 2 sculptures (10 sculptures / 5 paintings).
For Stefan, the opportunity cost of producing one painting is 3 sculptures (6 sculptures / 2 paintings).
Comparing the opportunity costs, we can see that Mikhail has a lower opportunity cost for paintings (2 sculptures per painting) compared to Stefan (3 sculptures per painting). Therefore, Mikhail has a comparative advantage in paintings.
Similarly, for sculptures, Mikhail's opportunity cost is 0.5 paintings (5 paintings / 10 sculptures), while Stefan's opportunity cost is 3 sculptures per painting. Thus, Stefan has a lower opportunity cost for sculptures, indicating a comparative advantage in sculptures.
In conclusion, Mikhail has a comparative advantage in paintings, and Stefan has a comparative advantage in sculptures based on their respective maximum outputs per day.
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4. a) If the price is set at $15 per pound, then would that be considered as in price ceiling or floot? b) If the price is set at $15 per pound, then there would be a (shortage surplus) of pounds of shrimp.
a) A price floor would be established if the price was set at $15 per pound. A price floor is a minimum cost established by the government or a regulatory agency to keep costs from dropping too low. In this instance, the price of $15 per pound acts as a floor price to prevent prawn prices from dropping below that mark.
b) There would probably be an excess of pounds of prawns if the price was fixed at $15 per pound. When there is more supply than demand at a particular price, there is a surplus. Setting the price below $15 per pound if the market equilibrium price (the price at which quantity supplied equals quantity requested) exists a surplus will emerge if the price is higher than the equilibrium price. While customers might be unwilling to buy prawns at that higher price, suppliers will be happy to sell more pounds of prawns at $15, resulting in an excess supply or surplus in the market.
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On January 1, 2021, the Haskins Company adopted the dollar-value LIFO method for its one inventory pool. The pool's value on this date was $740,000. The 2021 and 2022 ending inventory valued at year-end costs were $780,000 and $861,000, respectively. The appropriate cost indexes are 1.04 for 2021 and 1.05 for 2022. Required: Complete the below table to calculate the inventory value at the end of 2021 and 2022 using the dollar-value LIFO method. (Round "Year end cost index" to 2 decimal places. Round other final answer values to the nearest whole dollars.) Inventory Layers Converted to Base Year Cost Inventory Layers Converted to Cost Inventory DVL Cost Date Inventory at Year-End Cost Year-End Cost Index Inventory Layers at Base Year Cost Inventory Layers at Base Year Cost Year-End Cost Index Inventory Layers Converted to Cost 01/01/2021 Base 12/31/2021 Base 2021 12/31/2022 Base 2021 2022
The dollar-value LIFO (Last-In, First-Out) method is used by companies to value their inventory based on the current cost of replacing the inventory items. To calculate the inventory value at the end of 2021 and 2022 using the dollar-value LIFO method, we need to consider the base-year cost, year-end cost index, and the inventory layers converted to base year cost and cost.
At the beginning of 2021 (January 1), the Haskins Company adopted the dollar-value LIFO method with an inventory pool value of $740,000. This serves as the base-year cost.
To calculate the inventory value at the end of 2021, we need to convert the inventory layers to base-year cost. The year-end cost index for 2021 is given as 1.04. Multiplying the year-end inventory value of $780,000 by the year-end cost index (1.04), we get $811,200 as the inventory value at base-year cost.
Moving on to 2022, we need to convert the inventory layers to cost. The inventory value at the end of 2021 ($811,200) becomes the base-year cost. The year-end cost index for 2022 is given as 1.05. Multiplying the base-year cost by the year-end cost index, we find that the inventory value at the end of 2022 is approximately $851,760.
To summarize, the inventory value at the end of 2021 is $811,200, and the inventory value at the end of 2022 is approximately $851,760.
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The directors of GHP Ltd. ask you to advise them in the following situation:
The directors consider that they should invest profits into purchasing capital equipment, rather than declaring a dividend. The shareholders are unhappy and the directors wish to know whether a court is likely to interfere with their discretion not to declare a dividend.
In addition, you should advise what the possible practical consequences are for the directors if they adopt a meagre dividend policy.
In GHP Ltd. the directors may consider investing profits into purchasing capital equipment rather than declaring a dividend. If the shareholders are unhappy, they may consider seeking a court's intervention, challenging the directors' discretion to not declare a dividend.
However, it is important to note that the directors have a fiduciary duty to act in the best interests of the company, not just the shareholders. As such, a court is unlikely to interfere unless the directors have acted dishonestly or fraudulently in making that decision.
The practical consequences of adopting a meagre dividend policy may include a decline in shareholder confidence, leading to a decrease in share price. This could, in turn, make it harder for the company to raise capital in the future, which could restrict its growth and profitability.
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Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations: Variable costs per unit: Manufacturing: Direct materials 29 13 Direct labor $4 Variable manufacturing overhead $3 Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead 400,000 Fixed selling and administrative expenses 70,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company's product is $57 per unit.
Therefore, the company's gross profit has increased in the second year of operation compared to the first year of operation. The calculations help in determining the net income and cash flow of the company.
Walsh Company manufactures and sells a single product, and the information relating to the company's first two years of operations are provided below:
Variable costs per unit: Manufacturing:
Direct materials $29 Direct labor $13 Variable manufacturing overhead $3 Variable selling and administrative
Fixed costs per year: Fixed manufacturing overhead $400,000
Fixed selling and administrative expenses $70,000
During the first year of operations, Walsh manufactured 50,000 units and sold 40,000 units at a selling price of $57 per unit.
Variable costs per unit of manufacturing consists of direct materials, direct labor, and variable manufacturing overhead, which comes up to $45 per unit.
The total variable costs for 50,000 units will be 50,000 × $45 = $2,250,000.
Fixed manufacturing overhead is $400,000, and this figure will remain the same, regardless of the number of units manufactured.
Fixed costs of selling and administrative expenses are $70,000.
Total manufacturing cost for 50,000 units will be $2,250,000 + $400,000 + $70,000
= $2,720,000.
The cost per unit will be $2,720,000 ÷ 50,000
= $54.40.
The cost of goods sold is $54.40 × 40,000
= $2,176,000, and the gross profit is $57 × 40,000 − $2,176,000
= $1,064,000.
During the second year of operations, Walsh manufactured 40,000 units and sold 50,000 units.
The total manufacturing cost will be $54.40 × 40,000
= $2,176,000.
The cost of goods sold will be $54.40 × 50,000
= $2,720,000, and the gross profit will be $57 × 50,000 − $2,720,000
= $1,590,000.
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(ACF231) Taxation Accounting Problem Solving (bl: 5 Marks) The International Trading Company imported goods with value of 4,000,000BD and paid 1,000,000BD as custom fees. The company paid 10% VAT on total cost of the imported goods. If the company has sales as following: First month: 1,000,000BD Second month: 1,500,000BD Third month: 2,000,000BD Fourth Month: 2,500,000BD Required: 1) What is the VAT paid and the VAT collected by this company? 2) Prepare VAT tax due statement on monthly basis for this company.
To solve the problem, we need to calculate the VAT paid and the VAT collected by the International Trading Company and prepare a VAT tax due statement on a monthly basis. Here's how we can approach the problem:
1) Calculating VAT Paid and VAT Collected:
The VAT paid by the company is 10% of the total cost of the imported goods. Since the imported goods' value is 4,000,000 BD, the VAT paid can be calculated as follows:
VAT Paid = 10% of 4,000,000 BD = 400,000 BD
The VAT collected by the company is 10% of the sales in each month. We can calculate the VAT collected for each month as follows:
First month: 10% of 1,000,000 BD = 100,000 BD
Second month: 10% of 1,500,000 BD = 150,000 BD
Third month: 10% of 2,000,000 BD = 200,000 BD
Fourth month: 10% of 2,500,000 BD = 250,000 BD
2) VAT Tax Due Statement on a Monthly Basis:
To prepare the VAT tax due statement, we need to calculate the VAT tax due for each month by subtracting the VAT paid from the VAT collected.
VAT Tax Due Statement:
Month 1: VAT collected - VAT paid = 100,000 BD - 400,000 BD = -300,000 BD (overpaid)
Month 2: VAT collected - VAT paid = 150,000 BD - 400,000 BD = -250,000 BD (overpaid)
Month 3: VAT collected - VAT paid = 200,000 BD - 400,000 BD = -200,000 BD (overpaid)
Month 4: VAT collected - VAT paid = 250,000 BD - 400,000 BD = -150,000 BD (overpaid)
According to the VAT tax due statement, the company has overpaid the VAT in each month.
Note: In practice, there may be specific rules and regulations for VAT calculations and reporting in a particular jurisdiction. The calculations provided here are based on the given information and general VAT principles. It's always advisable to consult with a tax professional or refer to the specific tax regulations applicable to your jurisdiction for accurate and up-to-date information.
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2.) David borrowed $4,000 from you 5 years ago. You are charging David 5% interest. How much does David owe you today? No payments have been made. Round to the nearest dollar in your answer and show your work!
David owes you $5,250 today.
To calculate the amount David owes after 5 years with 5% interest, we can use the simple interest formula: I = P * r * t, where I is the interest, P is the principal amount, r is the interest rate, and t is the time in years.
In this case, the principal amount (P) is $4,000, the interest rate (r) is 5% (which can be written as 0.05), and the time (t) is 5 years.
Using the formula: I = $4,000 * 0.05 * 5 = $1,000
The interest accrued over 5 years is $1,000. Adding this interest to the principal amount, the total amount David owes is $4,000 + $1,000 = $5,000. Rounding to the nearest dollar, David owes you $5,250 today.
Note: The calculation assumes that no payments have been made towards the debt over the 5-year period.
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Which is an example of a non-controllable cost? O a. Housekeeping salaries O b. Housekeeping wages O c. Laundry equipment depreciation O d. Linen cost per occupied room K
Laundry equipment depreciation is an example of a non-controllable cost . The given options are costs associated with the hotel industry. The fixed cost refers to the cost that does not change with the changes in sales volume or activity level.
While the variable cost refers to the cost that varies with the changes in sales volume or activity level.Laundry equipment depreciation is an example of a non-controllable cost. Depreciation is defined as the decrease in the value of an asset.
It is used to describe the expenses incurred to reduce the value of a tangible asset over a period of time. Depreciation is not controllable, as it is associated with fixed assets that wear out over time. It is a non-cash cost and does not represent any money going out of the business.
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Lowden Company uses job order costing and applies overhead to each job at the rate of 163% of direct materials cost. During the current period, direct labor cost is $64,000 and direct materials cost is $76,000. How much overhead cost should Lowden Company apply in the current period? Multiple Choice a) $123,880. b) $39,264. c) $46,626. d) $76,000. e) $64,000.
To calculate the overhead cost that Lowden Company should apply in the current period, we need to multiply the direct materials cost by the overhead application rate.
Direct materials cost = $76,000
Overhead application rate = 163% = 1.63
Overhead cost = Direct materials cost * Overhead application rate
Overhead cost = $76,000 * 1.63
Overhead cost = $123,880
Therefore, the overhead cost that Lowden Company should apply in the current period is $123,880.
The correct answer is:
a) $123,880.
Explanation:
The overhead application rate of 163% means that for every dollar of direct materials cost, $1.63 of overhead cost is applied to the job. Multiplying the direct materials cost by the overhead application rate gives us the total overhead cost to be applied.
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QUESTION 1
What are three provincial courts in Canada?
A. The Provincial Courts of Appeal, the Provincial Superior Courts, the Provincial Courts.
B. The Provincial Courts, the Provincial Courts of Appeal, the Provincial Tax Court
C. The Provincial Tax Court, the Provincial Military Court, the Provincial Courts of Appeal
The three provincial courts in Canada are the Provincial Courts of Appeal, the Provincial Superior Courts, and the Provincial Courts.
In Canada, there are three different levels of court systems, one at the federal level, one at the provincial and territorial levels, and the final one at the municipal level. The three provincial courts in Canada are the Provincial Courts of Appeal, the Provincial Superior Courts, and the Provincial Courts.
The Provincial Courts of Appeal are the highest court in the provincial court system, and they are responsible for hearing appeals from judgments made by Provincial Superior Courts. The Provincial Superior Courts are responsible for dealing with criminal and civil matters, as well as other legal matters, such as family law and estate matters. Finally, the Provincial Courts are responsible for handling less serious criminal matters, such as traffic violations and minor criminal offenses, as well as small claims court cases.
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Considering that the market structure is one of the main factors determining the attractiveness of a market. With an aid of examples, discuss how the market structure can be used to determine the attractiveness of a market. (10)
Market structure is crucial in determining market attractiveness as it influences factors like competition, profit potential, barriers to entry, and market power.
Different structures such as perfect competition, monopoly, oligopoly, and monopolistic competition impact the dynamics and opportunities within a market.
The market structure plays a crucial role in determining the attractiveness of a market. It refers to the characteristics of a market, such as the number and size of firms, the degree of product differentiation, barriers to entry, and the level of competition. By analyzing the market structure, businesses and investors can assess the potential profitability and competitiveness of a market. Here are some examples of how market structure influences the attractiveness of a market:
1. Perfect Competition: In a perfectly competitive market, there are many small firms that produce homogeneous products, and there are no barriers to entry or exit. This market structure tends to be highly competitive, with low profit margins. While it may not offer significant profit potential, it can be attractive for businesses that prefer stability and low entry barriers.
2. Monopoly: A monopoly market structure exists when there is a single firm that dominates the market and has exclusive control over the supply of a particular product or service. Due to the lack of competition, monopolies can enjoy high profit margins and market power. However, such markets may face regulatory scrutiny and public backlash due to concerns about market control and consumer welfare.
3. Oligopoly: An oligopoly market structure is characterized by a small number of large firms that dominate the market. These firms can influence prices and engage in strategic behavior. Oligopolistic markets can be attractive due to the potential for higher profits and economies of scale. However, intense competition among the few major players can also lead to price wars and reduced profitability.
4. Monopolistic Competition: This market structure combines elements of both monopoly and perfect competition. There are many firms competing in the market, but each offers a slightly differentiated product. Monopolistic competition allows for some pricing power and product differentiation, which can be attractive to businesses seeking to establish a unique market position. However, firms may face challenges in maintaining customer loyalty and dealing with increased competition.
5. Barrier to Entry: Market structures with high barriers to entry, such as legal regulations, high capital requirements, or proprietary technology, can limit the number of competitors. This can create opportunities for existing firms to enjoy higher profits and market share. On the other hand, markets with low barriers to entry may attract new entrants, leading to increased competition and potentially lower profitability.
In conclusion, analyzing the market structure helps determine the attractiveness of a market by providing insights into the level of competition, potential profit margins, barriers to entry, and market power. Businesses and investors can use this information to make informed decisions regarding market entry, pricing strategies, and resource allocation. Understanding the market structure is essential for assessing the opportunities and risks associated with a particular market and formulating effective market strategies.
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A firm wishes to choose the location for a new factory. Profits obtained will depend on whether a new railroad spur is constructed to serve the town in which the new factory will be located. The following payoff table summarizes the relevant information:
New Railroad No New Railroad
Alternatives Spur Built Spur
Location A $1* $14
Location B 2 10
Location C 4 6
*Profits in $ millions.
Determine the location that should be chosen if the firm uses the maximax criterion. (Enter your answers in millions.)
Maximum payoff for each alternative:
Location A $ M
Location B $ M
Location C $ M
Maximax payoff: Location at M
If the firm uses the maximax criterion, they should choose Location A as the location for the new factory.The maximax criterion is a decision-making approach where the decision maker selects the alternative that maximizes the maximum possible payoff.
In this case, we have a payoff table with two alternatives: constructing a new railroad spur or not constructing it, and three possible locations for the new factory: A, B, and C.
To apply the maximax criterion, we need to find the maximum payoff for each alternative and choose the location with the highest maximum payoff.
The maximum payoffs for each location are calculated by selecting the highest value for each location:
Location A: Maximum payoff = $14 million (corresponding to the "No New Railroad" column)
Location B: Maximum payoff = $10 million (corresponding to the "No New Railroad" column)
Location C: Maximum payoff = $6 million (corresponding to the "No New Railroad" column)
Comparing the maximum payoffs for each location, we can see that Location A has the highest maximum payoff of $14 million. Therefore, if the firm uses the maximax criterion, they should choose Location A as the location for the new factory.
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Question 4: Consider four people: Martin is a risk-averse expected-utility maximizer. Angela evaluates gambles using a value function with loss aversion but not diminishing sensitivity (i.e., a two-part-linear value function). Louise evaluates gambles using a value function with diminishing sensitivity but not loss aversion (i.e., a value function that is concave over gains, convex over losses, but v(x) = -v(-x) for all x > 0). Roberto evaluates gambles using a value function with both loss aversion and diminish- ing sensitivity (i.e., a value function that has all three properties from prospect theory). Note: All four exhibit no probability weighting (i.e., use (P) = p). Now consider the following four choice situations: Choice (i): ( $4000, 1 ; $2000, X ) vs. ( $2450,1 ) Choice (ii): ( -$1500, ; -$300, 7 ) vs. ( -$950,1 ) Choice (iii): ( - $2400, { ; $0,7) vs. ( -$750,1 ) Choice (iv): ( $500, 1 ; -$500, 1) vs. ( $0,1 ) Choice (v): ( $200, ; -$800,) vs. ( $0,1 ) For each choice, describe for each of the four people whether we can determine which option they will choose or whether we need more information.
Louise evaluates gambles using a value function with diminishing sensitivity, so she will choose the option with the higher value for gains and the lower value for losses. Roberto evaluates gambles using a value function with both loss aversion and diminishing sensitivity, so he will choose the option with the higher value for gains and the lower value for losses.
For Choice (i), Martin is a risk-averse expected-utility maximizer, so he will choose the option with the higher expected utility. Angela evaluates gambles using a value function with loss aversion, so she will choose the option with the higher value for gains and the lower value for losses. For Choice (ii), we need more information to determine the choice for each person, as the values of X and 7 are not specified.For Choice (iii), Angela will choose the option with the higher value for gains and the lower value for losses. Louise will choose the option with the higher value for gains and the lower value for losses. Roberto will choose the option with the higher value for gains and the lower value for losses. For Choice (iv), we can determine that Martin will choose the option with the higher expected utility, Angela will choose the option with the higher value for gains and the lower value for losses, Louise will choose the option with the higher value for gains and the lower value for losses, and Roberto will choose the option with the higher value for gains and the lower value for losses. For Choice (v), we can determine that Martin will choose the option with the higher expected utility, Angela will choose the option with the higher value for gains and the lower value for losses, Louise will choose the option with the higher value for gains and the lower value for losses, and Roberto will choose the option with the higher value for gains and the lower value for losses.
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a =
5
b= 12
Q1. Suppose MPC is 0.8. If government purchases increases by $10c and cuts taxes by $503, how much the equilibrium output is changed?
The given MPC is 0.8. MPC stands for the marginal propensity to consume. Government purchases are increasing by $10c. The change in government purchases is represented by ∆G.
Taxes are being cut by $503. The change in taxes is represented by ∆T. We are to find the change in equilibrium output due to these changes. ∆G = $10c∆T = -$503. We know the formula for equilibrium output.Y = C + I + G + (X – M)C = a + b(Y – T) where Y = equilibrium output. Putting the values we get:C = 5 + 12 (Y – T)Y = C + I + G + (X – M) = a + b(Y – T) + I + G + (X – M)
Let us rearrange and substitute the values in the above equation.Y = a + bY – bT + I + G + X – M5 + 12 (Y – T) = a + bY – bT + I + G + X – M. Simplifying, we get:Y (1 – b) = a + 5 + I + G + X – 12TY = [a + 5 + I + G + X – 12T]/(1 – b). When the values are plugged in, we get:Y = [5 + 0.8Y – 12(-503)]/(1 – 0.8). Simplifying, we get:Y = 414.73
Therefore, the equilibrium output has changed by $414.73.
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Provide more context.
What is p(4) ? Define what you mean by x is approx. p(4)?
If the arrivals follow a poisson process, then expected number of buses arriving in 30 minuties is half the expected number to arrive in an hour. So if you the number of arrivals in one hour is Poisson with lambda = 4, then for a half hour, it is Poisson with lambda = 2
The probability of r arrivals in time t is given by: P(r,t) = e^(-λt) λ^r / r! Where λ = arrival rate per unit of time, t = time, and r = number of arrivals during time t. In this case, the expected number of arrivals in 30 minutes is half the expected number of arrivals in an hour, which means λ = 4/2 = 2. Hence, we have:λ = 2, t = 30 minutes = 0.5 hours P(r,0.5) = e^(-2 * 0.5) (2^r / r!)
Now, we can find the probability of different numbers of arrivals using the above formula. For example, the probability of 4 arrivals is:P(4,0.5) = e^(-2 * 0.5) (2^4 / 4!)≈ 0.0365This means that the probability of having exactly 4 arrivals in 30 minutes is about 0.0365 If the expected number of arrivals in an hour follows a Poisson process with λ=4, then the expected number of arrivals in 30 minutes is Poisson with λ=2.
We can find the probability of different numbers of arrivals using the Poisson distribution formula. For example, the probability of having exactly 4 arrivals in 30 minutes is about 0.0365. When we say x ≈ p(4), it means that x is approximately equal to the probability of having 4 arrivals in 30 minutes. In this case, x ≈ 0.0365.
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Hi, can you please check my work, specifically the gross margin. I think I didn't do that right. If not, please explain to me how to do it right.
Using direct labor hours as the base for allocating overhead costs to products, determine the cost per unit for each model and the total gross margin for each product for the upcoming year. The company’s pricing policy is cost plus 40%.
Overhead cost per unit for each model = Total budgeted overhead/total budgeted allocation base
= 900,000/[(5000 x 2) + (40,000 x 1)] = 900,000/50,000 = $18 per unit DLH
OH cost per model:
Deluxe
$18 per DLH x 2 DLH = $36
Regular
$18 per DLX x 1 DLH = $18
Deluxe Regular
Direct Materials $40 $25
Direct Labor $14 $7
OH Cost Per Unit $36 $18
TOTAL COST PER UNIT $90 $50
PRICE PER UNIT (COST + 40%) $126 $70
ANSWER: Cost per unit for Deluxe is $90 and cost per unit for Regular is $50. The gross margin for the Deluxe is $36 and the gross margin for Regular is $20. The company priced it at cost plus 40 percent which is $126 for the Deluxe and $70 for the Regular.
The calculations provided for overhead cost per unit for each model are correct. Let's calculate the total cost per unit for each model.TOTAL COST PER UNIT = Direct Materials + Direct Labor + OH Cost Per Unit Cost per unit for Deluxe = $40 + $14 + $36 = $90 Cost per unit for Regular = $25 + $7 + $18 = $50
Now, let's calculate the gross margin for each model.Gross Margin = Selling Price - Total Cost Per UnitGross margin for Deluxe = $126 - $90 = $36Gross margin for Regular = $70 - $50 = $20The company priced it at cost plus 40 percent which is $126 for the Deluxe and $70 for the Regular.
Therefore, the cost per unit for Deluxe is $90 and cost per unit for Regular is $50. The gross margin for the Deluxe is $36 and the gross margin for Regular is $20. The company priced it at cost plus 40 percent which is $126 for the Deluxe and $70 for the Regular.
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July 2022 You and a partner, Santa Claus, started a kayaking and canoeing lessons business in Brighton on July 1, 2021. You invested $50,000 in cash and Mr. Claus gave the business a used van he owned, valued at $30,000, to make deliveries and other business activities as required. On July 5th you and Santa went to the TD Bank and securd a $75,000 loan to be used in operating your business. July 6th the business purchased 8 kayaks and 8 canoes at total cost of $10,000. On July 7th the business had its first sale, 10 kayaking lessons. Kayaking lessons are $100 each and canoe lessons are $150 each. On July 8th the business hired an instructor to help with lesson, salary of $800 per week. July 10th , the business had 10 kayak lessons, customers to pay in August and 20 canoe lessons, paid in cash. Office supplies worth $500, for use in July, were purchased from Staples paying cash. Bell Canada came and connected your internet service charging $200, which he left you a bill for. This will be paid in August. More lessons were given the week of July 15th ,20 kayaking and 30 canoe. One half of the kayaking lessons were on 30 day payment terms the rest of the lessons were for cash. Rent for your facility is $5,000 which you paid July's on the 15th of the month. On July 31st you paid your instructor his salary for July. You and Santa each had withdrawals of $3,000. 1. Prepare a Chart of Accounts for your business. 2. Record all journal entries for July 3. Prepare a Trial Balance for July 31st 4. Prepare Income Statement, Changes in Equity and Balance Sheet for July 2021.
The Total Liabilities and Equity is $115,120. The chart of accounts is a listing of all accounts that are used in the business's accounting system.
1. Chart of accountsThe Chart of Accounts is a classified list of accounts used in the business' accounting system. It is the systematic grouping of accounts in order to create a record of all transactions and to create a system that will produce useful financial and accounting reports. The Chart of Accounts is designed to categorize all transactions into their respective accounts to provide meaningful information for the management of the business. The Chart of Accounts provides a framework for the accounting system and is an essential part of the accounting process. It helps in the organization and reporting of financial data.
2. Record all journal entries for JulyThe journal is the book of original entry where all transactions are recorded first in chronological order. The purpose of the journal is to provide a chronological record of all the transactions of the business. The journal entries for July are as follows:
3. Prepare a Trial Balance for July 31stThe trial balance is a statement of the balances in all the accounts of the business. It is prepared to check the accuracy of the accounting records and to ensure that the debits and credits in the ledger balance. The trial balance for July 31st is as follows:
4. Prepare Income Statement, Changes in Equity and Balance Sheet for July 2021The income statement, changes in equity, and balance sheet are the three financial statements that provide an overview of the financial performance of the business. The income statement shows the revenues, expenses, and net income for the period. The changes in equity statement shows the changes in equity during the period. The balance sheet shows the assets, liabilities, and equity of the business as of the end of the period. The financial statements for July 2021 are as follows:Explanation:The chart of accounts is a listing of all accounts that are used in the business's accounting system. It is an essential part of the accounting process as it helps in the organization and reporting of financial data.
In this scenario, the following chart of accounts can be used:CashAccounts receivableKayaksCanoesOffice suppliesAccumulated depreciation – vanVanSalaries expenseRent expenseInternet expenseInterest expenseLoan payableUnearned revenueSanta Claus, capitalYour name, capitalWithdrawalsRevenueThe journal entries for July are as follows:July 5: Cash $75,000Loan payable $75,000July 6: Kayaks $6,000Canoes $4,000Cash $10,000July 7: Accounts receivable $1,000Revenue $1,000July 8: Salaries expense $800Cash $800July 10: Accounts receivable $1,000Revenue $1,000Cash $3,000Unearned revenue $1,500July 10: Canoes $3,000Cash $3,000July 15: Rent expense $5,000Cash $5,000July 15: Salaries expense $800Salary payable $800July 31: Salary payable $1,600Cash $1,600July 31: Your name, capital $3,000Santa Claus, capital $3,000.
The trial balance for July 31st is as follows:DebitCreditCash$ 5,700 Accounts receivable 500 Kayaks 6,000 Canoes 4,000 Office supplies 500 Accumulated depreciation – van 120 Van 30,000 Salaries expense 1,600 Rent expense 5,000 Internet expense 200 Interest expense 100 Loan payable 75,000 Unearned revenue 1,500 Santa Claus, capital 53,880 Your name, capital 53,880 Revenue 2,000 $81,900 $81,900The Income Statement, Changes in Equity, and Balance Sheet are as follows:Income Statement Revenue$2,000Expenses:Salaries expense$2,400Rent expense$5,000Internet expense$200Interest expense$100Total Expenses$(7,700)Net income$(5,700)Changes in EquitySanta Claus, capital$30,000Your name, capital$20,000Net income$(5,700)Withdrawals$(6,000)Total Changes in Equity$38,300Balance SheetAssetsCash$5,700Accounts receivable$500Kayaks$6,000Canoes$4,000Office supplies$500Accumulated depreciation – van$120Van$30,000Total Assets$46,820LiabilitiesLoan payable$75,000Salaries payable$800Unearned revenue$1,500Total Liabilities$77,300EquitySanta Claus, capital$30,000Your name, capital$20,000Net income$(5,700)Withdrawals$(6,000)Total Equity$38,300Total Liabilities and Equity$115,120
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