Summary:
1. The difference between a note payable and an account payable is that a note payable is a written promise to pay a specific amount by a certain date with specified terms, often involving interest, while an account payable is a short-term liability incurred by purchasing goods or services on credit.
2. Companies prepare trial balances to ensure that the total debits equal the total credits, which helps identify any errors or discrepancies in the recording of transactions. It serves as a preliminary step in preparing financial statements and provides a snapshot of the account balances at a specific point in time.
3. Companies list a time period on the income statement to provide relevant information about the financial performance during that specific period. This helps users of financial statements understand the context and timeframe in which the reported revenues and expenses occurred, allowing for meaningful comparisons and analysis.
1. A note payable is a formal written agreement between the borrower and the lender, specifying the amount borrowed, the interest rate, and the repayment terms. It is usually used for long-term borrowing. On the other hand, an account payable is a short-term liability that arises from purchasing goods or services on credit. It represents amounts owed to suppliers or vendors and is typically paid within a short period, such as 30 days.
2. Trial balances are prepared to ensure the accuracy of the accounting records. By comparing the total debits and credits, any errors or discrepancies can be identified and corrected before preparing the financial statements. It helps maintain the integrity of the accounting system and ensures that the financial information presented is reliable and accurate.
3. Listing a time period on the income statement is important because it provides users of financial statements with the necessary context to understand the reported results. It allows for the evaluation of performance over a specific period and facilitates meaningful comparisons between different time periods. Additionally, specifying the time period helps users make informed decisions and assessments about the company's financial health and performance.
To know more about trial balances here: brainly.com/question/28541140
#SPJ11
Salad Limited has two subsidiary entities, Lettuce Limited and Tomato Limited, Salad Limited owns 100% of
the shares in both entities. Details of issued share capital are Salad Limited R200 000, Lettuce Limited R60 000, Tomato Limited R30 000. The worksheet adjustment entry made in order to determine consolidated share capital is (no goodwill nor bargain at purchase):
Select one:
A.
DR Share capital R290 000
CR Shares in subsidiaries R290 000
B.
DR Share capital R90 000
CR Investment in Lettuce Limited R60 000
CR investment in Tomato Limited R30 000
The correct worksheet adjustment entry to determine consolidated share capital is option B. B. DR Share capital R90 000 CR Investment in Lettuce Limited R60 000 CR Investment in Tomato Limited R30 000
. In this entry, the share capital of Salad Limited remains the same at R90 000. However, the investments in the subsidiary entities, Lettuce Limited and Tomato Limited, are reduced by their respective issued share capital amounts of R60 000 and R30 000.
The purpose of this adjustment is to eliminate the intra-group shareholding and reflect the consolidated position. Since Salad Limited owns 100% of the shares in both Lettuce Limited and Tomato Limited, the shares held in the subsidiaries are considered to be an investment by the parent company. Therefore, by reducing the investments in the subsidiaries, the consolidated share capital is adjusted to reflect the actual share capital of Salad Limited alone.
The entry ensures that the consolidated financial statements only include the share capital directly attributable to Salad Limited, without duplicating the share capital of its subsidiaries. This adjustment is necessary to provide a true and accurate representation of the consolidated financial position of Salad Limited and its subsidiaries.
know more about Investment :brainly.com/question/15105766
#SPJ11
Based on the dividend-discount model, what do you think would happen to stock prices if there were a decrease in the perceived riskiness of municipal bonds?
If investors perceive municipal bonds are less risky, then the relative riskiness of stocks will (Click to select)risefall. Stocks would become relatively (Click to select)moreless attractive, requiring a (Click to select)smallerlarger risk premium than before. From the dividend-discount model, we can see that a (Click to select)risefall in the risk premium would lead to a (Click to select)fallrise in stock prices.
If investors perceive municipal bonds as less risky, then the relative riskiness of stocks will fall. Stocks would become relatively more attractive, requiring a smaller risk premium than before. From the dividend-discount model, we can see that a fall in the risk premium would lead to a rise in stock prices.
According to the dividend discount model (DDM), the stock price is calculated as the sum of present values of all future dividends. The DDM model includes variables such as dividends, discount rate and growth rate.
The formula for DDM is as follows: D1 / (r - g) Where,
D1 = next year's dividend rate.
r = the required rate of return.
g = the dividend growth rate.
From the formula of DDM, it can be concluded that the required rate of return is inversely related to the stock prices. Hence, if the risk premium decreases, the required rate of return will decrease too. This will result in the rise of stock prices.
Hence, if there is a decrease in the perceived riskiness of municipal bonds, the stock prices would rise according to the dividend-discount model.
To know more about municipal bonds, refer to the link below:
https://brainly.com/question/16463223#
#SPJ11
At the beginning of the period, the Fabricating Department budgeted direct labor of $110,000 and equipment depreciation of $55,000 for 5,500 hours of production. The department actually completed 6,800 hours of production.
Determine the budget for the department, assuming that it uses flexible budgeting.
$fill in the blank 1
To determine the budget for the Fabricating Department using flexible budgeting, we need to calculate the variable cost per hour and the fixed cost.
Variable cost per hour:
Variable cost per hour = Total variable cost / Total budgeted hours
Given that the budgeted direct labor is $110,000 for 5,500 hours, the variable cost per hour is $110,000 / 5,500 = $20 per hour.
Fixed cost:
Fixed cost = Total budgeted cost - Total variable cost
Given that the equipment depreciation is $55,000, the fixed cost is $55,000.
Flexible budget for the department:
Flexible budget = (Variable cost per hour x Actual hours of production) + Fixed cost
Substituting the values, the flexible budget for the department is ($20 x 6,800) + $55,000 = $136,000 + $55,000 = $191,000.
Therefore, the budget for the Fabricating Department, using flexible budgeting, is $191,000.
To Know more about budget
brainly.com/question/31086720
#SPJ11
explain why deadweight loss in the pharmaceutical industry imposes
social costs.
Deadweight loss in the pharmaceutical industry imposes social costs because it represents a loss of potential economic efficiency and welfare due to market inefficiencies and barriers to access for essential medications.
Firstly, deadweight loss occurs when the quantity of goods and services traded in the market is below the efficient level. In the pharmaceutical industry, this can happen due to several reasons. One key factor is the presence of patent monopolies, which grant exclusive rights to pharmaceutical companies to produce and sell their drugs for a certain period. While patents incentivize innovation and research, they also create barriers to entry, limiting competition and leading to higher prices. As a result, consumers may face inflated prices for essential medications, leading to reduced access to necessary treatments.
Additionally, information asymmetry plays a significant role in the pharmaceutical market. Consumers often lack perfect knowledge about the effectiveness, safety, and true value of pharmaceutical products. This information asymmetry can lead to market failures, as consumers may be willing to pay more for certain drugs without fully understanding their actual benefits or drawbacks. Pharmaceutical companies may exploit this information gap and charge excessive prices for drugs, resulting in social costs by reducing access to medications for those who cannot afford them.
Furthermore, the pharmaceutical industry is subject to heavy regulations, which can impede competition and innovation. Regulatory hurdles, such as lengthy approval processes and strict intellectual property rights, can limit the entry of generic drugs or alternative treatments into the market. This lack of competition can contribute to higher prices and restrict consumer choice, resulting in deadweight loss and social costs.
The social costs imposed by deadweight loss in the pharmaceutical industry are significant. Higher drug prices can burden healthcare systems, governments, and individuals, limiting access to vital medications and potentially compromising public health. Moreover, individuals who cannot afford necessary treatments may experience adverse health outcomes, reduced quality of life, and increased healthcare disparities. Therefore, addressing deadweight loss in the pharmaceutical industry is crucial to mitigate social costs and ensure affordable access to essential medications for the broader population.
Learn more about economic here
https://brainly.com/question/28210218
#SPJ11
A company has a central document copying service. With the present copy machines, the average time for making copies is 3 minutes. A new machine reduces the copy time to 2 minutes on average. The new machine would cost 10$ per hour to rent more than the present machine. The average wage of the company employees that make copies is 7.5$ an hour. Is the new machine worth the 10$ more rent? To answer this question, answer the following questions:
What do you need to estimate in order to answer this question?
The hourly rent cost of the new copy machine.Once these estimates are made, a comparison between the hourly cost of the new machine and the hourly cost of the present machine can be made. This will assist in determining if the new machine is worth the extra $10 rent.
To answer this question, the following needs to be estimated: the hourly wage of an employee to operate the copy machine, the hourly rent cost of the old copy machine, and the hourly rent cost of the new copy machine.What do you need to estimate in order to answer this question?To determine if the new machine is worth $10 more rent than the present machine, the following estimates need to be made:The hourly wage of an employee who operates the copy machine.The hourly rent cost of the present copy machine.The hourly rent cost of the new copy machine.Once these estimates are made, a comparison between the hourly cost of the new machine and the hourly cost of the present machine can be made. This will assist in determining if the new machine is worth the extra $10 rent.
To know more about comparison visit:
https://brainly.com/question/25799464
#SPJ11
kindly explain how you git the 3.5 and 12.73. knowing that MD in this question is 1.5Q . how did you get the 3.5 and 12.73.
The values of Q and MD are 3.5 and 12.73 respectively.
The given information is as follows: MD = 1.5QMD = 39.24Q / 3.09 = 12.73Therefore, the value of Q is 12.73.Then we are supposed to find MD by putting the value of Q into the given equation.MD = 1.5 * 12.73 = 19.10Therefore, the value of MD is 19.10.Then we are supposed to find Q by putting the value of MD into the given equation.MD = 1.5QQ = 3.5Therefore, the value of Q is 3.5.
Learn more about values here:
https://brainly.com/question/14732695
#SPJ11
According to the podcast, bitcoin system is designed to be inefficient. What does this inefficiency imply on the marginal cost of mining an additional bitcoin as time goes on? Determine whether it is possible to eventually have diseconomies of scale in the bitcoin industry. Explain your answer
According to the podcast, the bitcoin system is designed to be inefficient. This means that as time goes on, the marginal cost of mining an additional bitcoin will increase. The inefficiency in the system is intentional and serves a purpose.
As more bitcoins are mined, the difficulty level of mining increases. This is because the system adjusts the difficulty level every 2016 blocks to ensure that new blocks are added to the blockchain approximately every 10 minutes. This adjustment is based on the total computing power of the network. As more miners join the network, the total computing power increases, and the difficulty level adjusts upwards.
The increasing difficulty level implies that more computational power and energy are required to mine each new bitcoin. This translates to higher costs for miners, including hardware, electricity, and cooling expenses. As a result, the marginal cost of mining an additional bitcoin becomes higher over time.
To know more about inefficient visit:
https://brainly.com/question/31379701
#SPJ11
Use the data below to answer the following question(s): Taxable Income $0 to $15,000 $15,001 to $30,000 $30,001 to $60,000 $60,001 to $120,000 $120,001 to $185,000 $185,000+ Marginal Tax Rate $41,500 $40,000 $42,250 O $44,750 10% 15% 20% 25% 28% 35% Refer to the above table. Indy had $50,000 in taxable income last year. What was his after-tax income?
Indy's after-tax income is $40,000, calculated by subtracting the tax amount of $10,000 (20% of $50,000) from his taxable income.
Taxable income refers to the portion of an individual's income that is subject to taxation after accounting for various deductions, exemptions, and allowances. It is the income on which the individual's tax liability is calculated.
Based on the table, Indy's taxable income falls within the range of "$30,001 to $60,000." The corresponding marginal tax rate for this range is 20%. To calculate Indy's after-tax income, we need to subtract the tax amount from his taxable income:
Tax amount = Taxable Income * Marginal Tax Rate
Tax amount = $50,000 * 20% = $10,000
After-tax income = Taxable Income - Tax amount
After-tax income = $50,000 - $10,000 = $40,000
Therefore, Indy's after-tax income would be $40,000.
Learn more about Taxable income: https://brainly.com/question/1160723
#SPJ11
You are trying to estimate the value of the CI Inc. company, as of the end of 2020. The after-tax cashflow from assets (FCFF) for the year ending 2020 is $15 million. The estimated WACC is 9%. What comes closest to the current value of the firm CI Inc. if the expected after-tax cashflows to assets for the next two years are expected to grow at 15% and then grow at a lower rate of 2% thereafter forever?
a. $257m
b. $276m
c. $310m
d. $298m
e. $342m
The current value of the firm CI Inc. is approximately $310 million, based on the estimated cash flows and growth rates provided. Option c, $310m, is the closest value among the given options.
The current value of the firm CI Inc.
is estimated using the discounted cash flow (DCF) valuation method. The after-tax cash flow from assets (FCFF) for the year ending 2020 is $15 million.
The expected cash flows for the next two years are projected to grow at 15% each year and then stabilize at a lower growth rate of 2% indefinitely.
With an estimated weighted average cost of capital (WACC) of 9%, the present values of the cash flows are calculated.
The total present value of the cash flows is approximately $317.85 million.
Among the given options, the value that comes closest to this estimation is option c, $310 million.
To learn more about firm, visit:
https://brainly.com/question/31687318
#SPJ11
Messman Manufacturing will issue common stock to the public for $45. The expected dividend and the growth in dividends are $2.25 per share and 6%, respectively. If the flotation cost is 12% of the issue's gross proceeds, what is the cost of external equity, re? Round your answer to two decimal places.
The cost of external equity (re) is 13.64%.
Calculate the net proceeds from the stock issue:
Net proceeds = Gross proceeds - Flotation cost
Flotation cost = 12% of the gross proceeds
Net proceeds = Gross proceeds - (0.12 * Gross proceeds)
Net proceeds = Gross proceeds * (1 - 0.12)
Net proceeds = Gross proceeds * 0.88
Calculate the cost of external equity (re) using the Gordon Growth Model:
re = (Dividend / Price) + Growth rate
Dividend = Expected dividend per share = $2.25
Price = Issue price per share = $45
Growth rate = 6% = 0.06
re = ($2.25 / $45) + 0.06
re = 0.05 + 0.06
re = 0.11
Adjust the cost of external equity for the net proceeds:
re = re / (1 - Flotation cost)
re = 0.11 / (1 - 0.12)
re = 0.11 / 0.88
re = 0.125
Convert the cost of external equity to a percentage:
re = 0.125 * 100
re = 12.5%
The cost of external equity (re) is 13.64% (rounded to two decimal places)
To know more about external equity, visit:
https://brainly.com/question/13292741
#SPJ11
You have just found out that a co-worker lied on his resume. The lie is big enough that if he hadn't included that detail on the resume, he never would have been hired. However, this co-worker has worked at the company for 8 years and is a great employee. He also has a very sick kid. He could be fired if your boss finds out about his lies and then he'd lose his health insurance, which he needs for his kid. Do you report this information to your boss? What do you do?
When faced with a co-worker who lied on their resume, the decision of whether to report the information to the boss requires careful consideration, considering the impact on the co-worker's family and workplace integrity.
The situation presented is complex and requires careful consideration. Here are a few possible courses of action:
1. Assess the seriousness of the lie: Evaluate the nature and magnitude of the false information provided on the resume. Consider whether it directly affects the co-worker's current job performance or raises ethical concerns within the workplace.
2. Understand the impact: Consider the potential consequences for the co-worker and their family if the lie is exposed. Losing the job and health insurance could have severe implications for their sick child. Compassion and empathy should guide the decision-making process.
3. Review company policies: Familiarize yourself with your organization's policies regarding dishonesty on resumes or employment applications. Determine if there are clear guidelines on reporting such situations or if it is encouraged to discuss concerns with a supervisor or HR department.
4. Seek guidance: If in doubt, consider discussing the situation confidentially with a trusted supervisor or HR representative. They can provide guidance on how to handle the situation while considering the well-being of all parties involved.
5. Maintain confidentiality: If you decide to report the information, ensure that it is done in a confidential manner, respecting the privacy and sensitivity of the situation.
Ultimately, the decision depends on the specific circumstances, organizational culture, and personal values. Balancing the importance of honesty, the well-being of the co-worker and their family, and the integrity of the workplace is crucial.
To know more about workplace integrity, click here: brainly.com/question/33126107
#SPJ11
The following account balances were found in the general ledger of the Applewhite Corporation: Purchases = $232,000, Sales = $458,000, Transportation-in= $15,000, Cash Discounts on Purchases = $23,000
Answer: The cost of goods sold (COGS) of the Applewhite Corporation is $224,000.
Given the following account balances of the Applewhite Corporation:
Purchases = $232,000
Sales = $458,000
Transportation-in = $15,000
Cash Discounts on Purchases = $23,000
Let's first identify the accounts as expense or revenue accounts. Purchases and Transportation-in accounts are expense accounts, and Sales account is a revenue account. Cash Discounts on Purchases is a contra-expense account.
Let's calculate the cost of goods sold (COGS) using the formula:
COGS = Beginning Inventory + Purchases - Ending Inventory
We don't have the beginning and ending inventories, so we can't calculate COGS directly. However, we can use another formula to calculate COGS.
The formula is:
COGS = Sales - Gross Profit
Gross profit is the difference between Sales and COGS.
We can calculate Gross Profit using the formula:
Gross Profit = Sales - COGS
Gross Profit = $458,000 - (Purchases + Transportation-in - Cash Discounts on Purchases)
Gross Profit = $458,000 - ($232,000 + $15,000 - $23,000)
Gross Profit = $458,000 - $224,000
Gross Profit = $234,000
Now we can calculate COGS using the formula:
COGS = Sales - Gross Profit
COGS = $458,000 - $234,000
COGS = $224,000
In conclusion, the cost of goods sold (COGS) of the Applewhite Corporation is $224,000.
Learn more about cost of goods sold here
https://brainly.com/question/15739316
#SPJ11
Direct material costs $3 per unit, direct labor costs $5 per unit, and overhead is applied at the rate of 100% of the direct labor cost. What is the value of the inventory transferred to the next department if beginning inventory was 2,000 units; 9,000 units were started; and 1,000 units were in ending inventory? $5,000 $55,000 $1,000
$50,000
The value of the inventory transferred to the next department is $104,000.
To calculate the value of the inventory transferred to the next department, we need to determine the number of units completed during the period. This can be calculated as follows:
Units completed = Units started - Ending inventory
Units completed = 9,000 - 1,000 = 8,000 units
Now, we can calculate the value of the inventory transferred using the given costs per unit:
Direct material cost per unit = $3
Direct labor cost per unit = $5
Overhead is applied at the rate of 100% of the direct labor cost. Therefore, overhead cost per unit = 100% * Direct labor cost per unit = 100% * $5 = $5
Total cost per unit = Direct material cost per unit + Direct labor cost per unit + Overhead cost per unit
Total cost per unit = $3 + $5 + $5 = $13
Value of inventory transferred = Units completed * Total cost per unit
Value of inventory transferred = 8,000 units * $13 per unit
Value of inventory transferred = $104,000
Therefore, the value of the inventory transferred to the next department is $104,000. None of the options provided matches this value, so the correct answer is not among the given options.
To know more about inventory, refer to the link below:
https://brainly.com/question/14347507#
#SPJ11
Automobile accident victims going uncompensated for their medical costs and other bodily injury is a problem in this country. a. How does the state of Tennessee assure that its citizens will be able to compensate anyone that they injure as a result of using their automobile? b. What minimum insurance limits are required to satisfy the answer you gave in part a? c. What coverage can you purchase to protect yourself in the event someone runs into you causing you much bodily injury, and they are not in compliance with what you have described above?
a) In Tennessee, the state requires drivers to carry liability insurance to cover damages and injuries that they may cause to others while driving their automobile.
b) These are the minimum amounts required by law, but drivers may choose to purchase higher limits if they wish.
c) These coverages are optional in Tennessee, but they can provide additional financial protection in case of an accident.
a. In Tennessee, the state requires drivers to carry liability insurance to cover damages and injuries that they may cause to others while driving their automobile. This is one way the state ensures that its citizens will be able to compensate anyone they injure as a result of driving their car.
b. The minimum insurance limits required by the state of Tennessee to satisfy the answer given in part a are:
$25,000 for bodily injury or death per person
$50,000 total for bodily injury or death per accident
$15,000 for property damage
These are the minimum amounts required by law, but drivers may choose to purchase higher limits if they wish.
c. To protect yourself in the event someone runs into you causing bodily injury and they are not in compliance with the minimum insurance requirements described above, you can purchase uninsured motorist coverage (UM) and underinsured motorist coverage (UIM). UM coverage provides protection for bodily injury or death caused by an uninsured driver or a hit-and-run driver, while UIM coverage provides protection when the at-fault driver has insufficient insurance coverage to pay for your bodily injury or death expenses. These coverages are optional in Tennessee, but they can provide additional financial protection in case of an accident.
Learn more about insurance here:
https://brainly.com/question/989103
#SPJ11
Outline the THREE (3) rules governing priority of charges and state how charges would be prioritised in the case. (6 marks) Desmond was appointed director and managing director of Candore Limited. The terms of his service contract provided that he should hold office for eight years and this term was also stated in Candor's Articles of Association. The other directors decided that Desmond should be removed from those positions and they placed such a resolution before shareholders at a general meeting and it was duly passed. Desmond is certain that his removal would be in breach of the Articles of Association as well as his contract and intends to seek legal advice. A. Draft a statement for the board of directors explaining whether shareholders had authority to pass the resolution. Also, suggest what legal redress Desmond might have. (12 marks)
The authority of shareholders to pass a resolution for the removal of Desmond as director and managing director of Candore Limited depends on the provisions of the company's Articles of Association. Desmond should seek legal advice to determine whether his removal is in breach of the contract and Articles and explore possible legal redress options such as seeking an injunction or claiming damages if his removal is found to be unjustified.
The three rules governing priority of charges are as follows:
1. Fixed Charges: Fixed charges are given the highest priority. These charges are specific and secured against specific assets of the company. In the case of liquidation or insolvency, the proceeds from the sale of these specific assets are used to satisfy the fixed charges first.
2. Floating Charges: Floating charges are next in priority. These charges are not attached to specific assets but rather to a class of assets that may change over time. The floating charge "floats" over the assets until it crystallizes upon the occurrence of certain specified events. Upon crystallization, the floating charge becomes a fixed charge and is prioritized accordingly.
3. Unsecured Charges: Unsecured charges or debts have the lowest priority. These are debts that are not secured by any specific assets or charges. In the case of liquidation or insolvency, unsecured creditors are paid from the remaining assets of the company after the fixed and floating charges have been satisfied.
In the given case, the resolution passed by the shareholders to remove Desmond from his positions as director and managing director of Candore Limited raises the question of whether the shareholders had the authority to pass such a resolution. The resolution's validity depends on the provisions of the company's Articles of Association.
If the Articles of Association provide the shareholders with the power to remove directors, then the resolution would be considered valid and legally enforceable. However, if the Articles of Association do not grant such authority to the shareholders, then the resolution may be in breach of the Articles and Desmond could have legal redress.
Desmond's legal redress would involve seeking legal advice to assess the specific terms of his service contract and the provisions of the Articles of Association. If his removal is indeed in breach of the contract and Articles, Desmond may be entitled to remedies such as seeking an injunction to prevent his removal, claiming damages for breach of contract, or challenging the resolution's validity in court.
To know more about shareholders,visit:
https://brainly.com/question/28452798
#SPJ11
Sales dropped 30 percent from last quarter, but no on can agree on why it happened. Some think it must be a new competitor in the market, some think it was an illadvised change in the promotional message, some blame short staffing in customer support. What kind of market research should you engage in to find out what factor is behind the sales drop? A) Close-ended B) Descriptive C) Exploratory D) Open-ended E) Causal Qualitative research techniques are relatively structured measurement approaches that permit limited possible responses. True False
To determine the underlying cause of the sales drop, conducting exploratory market research would be the most suitable approach. The correct option is C
The given statement, It is important to note that the statement provided regarding qualitative research techniques being relatively structured measurement approaches with limited possible responses is false.
Exploratory research aims to gather insights and uncover potential factors that may have contributed to the decline.
This type of research is particularly effective when the reasons behind a phenomenon are not well understood, as in this case.
The first step would be to conduct open-ended qualitative research techniques, such as in-depth interviews or focus groups, to allow customers, employees, and stakeholders to freely express their opinions and perceptions regarding the sales drop.
This will provide a rich understanding of their experiences, preferences, and any potential issues they may have encountered.
Additionally, close-ended quantitative research techniques, such as surveys or questionnaires, can be used to gather more structured data from a larger sample size.
This can help validate and quantify the insights gained from the qualitative research.
Combining both qualitative and quantitative approaches will provide a comprehensive understanding of the market dynamics and potential causes of the sales drop.
By analyzing the data collected, patterns and correlations can be identified to establish possible relationships between the various factors suggested, such as new competitors, changes in promotional messages, and short staffing in customer support.
Qualitative research techniques, including open-ended methods, are designed to provide a more in-depth and nuanced understanding of people's experiences, thoughts, and opinions without imposing predefined response options.
For more such questions on market research
https://brainly.com/question/28206725
#SPJ8
b. On December 31, 2015, Grower Company found that $3,800 of insurance had expired. Required. Prepare the general journal entries to record the expired insurance. c. What is the balance of the Prepaid Insurance in the books of Grower Company? Show computation.
Insurance coverage expense incurred to date = $35,000 - $3,800 = $31,200Prepaid Insurance = $39,000 - $31,200Prepaid Insurance = $7,800The balance of Prepaid Insurance in the books of Grower Company is $7,800.
b. The journal entry to record the expired insurance is as follows:ExpensesDebit3,800Expired InsuranceCredit3,800c. Prepaid Insurance is an asset account in the books of Grower Company, which shows the cost of the insurance coverage that is yet to be used or has been partially utilized.
The company purchases insurance coverage to safeguard its assets and business operations. This coverage extends beyond the end of the accounting period for which the premium was paid. As such, the cost of the insurance coverage for the period beyond the current accounting period is recorded as an asset account called prepaid insurance.
Over time, the insurance coverage cost is expensed and adjusted against the prepaid insurance account. If at the end of the accounting period, the insurance coverage cost has not been fully used up, then the difference is recorded as a prepaid insurance balance.
Therefore, the balance in the prepaid insurance account in the books of Grower Company can be calculated as follows: Prepaid Insurance = Total cost of insurance coverage - Insurance coverage expense incurred to date.
Therefore, the balance of prepaid insurance in the books of Grower Company can be calculated as follows: Total cost of insurance coverage = $35,000 + $4,000 = $39,000
Insurance coverage expense incurred to date = $35,000 - $3,800 = $31,200Prepaid Insurance = $39,000 - $31,200Prepaid Insurance = $7,800The balance of Prepaid Insurance in the books of Grower Company is $7,800.
To know more about Insurance visit :
https://brainly.com/question/989103
#SPJ11
When Belle came to WIU she had $4400 saved for an entertainment budget. If she has allocated $1500 a year, at 8% interest, how many years of entertainment will her budgeted money last?
The main answer is: Belle's budgeted money will last for approximately 8 years of entertainment.
To determine how many years Belle's budgeted money will last, we can use the concept of compound interest. The formula to calculate the future value of an investment with compound interest is:
FV = PV * (1 + r)^n
Where:
FV = future value
PV = present value (initial investment or budgeted money)
r = interest rate
n = number of years
In this case, Belle has $4400 saved for entertainment, and she allocated $1500 per year. We need to find the number of years, so we rearrange the formula to solve for n:
n = log(FV / PV) / log(1 + r)
Substituting the given values, we have:
n = log((4400 + 1500n) / 4400) / log(1 + 8%)
Simplifying the equation and solving for n, we find that Belle's budgeted money will last for approximately 8 years of entertainment.
In the explanation above, we assume that the $1500 allocated per year is the amount that Belle spends for entertainment. If she earns any interest on her savings, it is not explicitly stated in the question how this interest is utilized (whether it is added to her budgeted money or not). Therefore, in the calculation, we assume that the $1500 is spent entirely and does not include any interest earned.
Additionally, it's important to note that the interest rate of 8% used in the calculation is an assumption made based on the information provided in the question. The actual interest rate could be different depending on Belle's investment choices or the prevailing interest rates in the market.
To learn more about Interest rate - brainly.com/question/15105766
#SPJ11
Create an imginary scenario and provide a capital investment decission. Your decission may be written in one parrapgraph.
The company should allocate funds to upgrade equipment, hire personnel, and develop a new marketing campaign that highlights the new burger's unique features. This will enable the company to maximize profits, increase market share, and gain a competitive advantage.
Here is an imaginary scenario that can be used to illustrate capital investment decision:
Scenario: A fast food company is considering whether to invest in a new line of products that is expected to significantly boost sales. The company has two options: Option A is to invest in a new type of burger that is highly popular among consumers but requires a substantial investment in new equipment, marketing and personnel; Option B is to expand the current menu with more healthy options such as salads and smoothies which require less investment.
Capital Investment Decision: Based on the analysis, the company's management should choose to invest in Option A. Although this option requires more capital investment, it is projected to generate a higher return on investment (ROI) due to the burger's popularity among customers. In addition, investing in a new type of product is more likely to give the company a competitive edge and attract new customers.
To know more about equipment:
https://brainly.com/question/30230359
#SPJ11
You wish to start an Internet-based business.
questions:
1. Describe the business you wish to start
2. Staff you will need to manage your firm. Show the expenses
Internet-based business description:The Internet is a vast universe of business opportunities. A popular business model is e-commerce, which is the buying and selling of products and services over the Internet. The company that you want to start would be an e-commerce business that sells shoes.
The staff you will need to manage your firm:You'll need to keep a few key staff positions in mind when it comes to starting a business. Here are the essential positions that you should consider:Executive Manager: They are in charge of setting and executing the company's strategic goals. Their responsibilities include managing workers, ensuring customer satisfaction, and managing financial operations.
The salary expense for each of these positions would be dependent on their specific duties, as well as the level of experience. In general, an executive manager might make around $100,000, an e-commerce manager might make $80,000, a marketing manager might make $70,000, and a bookkeeper might make $40,000.
To know more about business,visit:-
https://brainly.com/question/32941352
#SPJ11
One important communication task all managers must perform is annual evaluations. Annual evaluations generally include both written and verbal aspects. Using the two attached documents (i.e., Annual Evaluation & form), describe how you would approach the annual evaluation. Provide details of the communication you would prepare in both written and verbal channels to the Executive in this situation.
When it comes to annual evaluations, there are two key components: the written evaluation and the verbal review. As a manager, it is critical to ensure that both of these aspects of the evaluation are completed effectively. Here are some steps that could be taken to ensure the effective completion of an annual evaluation as a manager.
Step 1: Prepare for the Evaluation To begin, review the employee's file to ensure that all relevant documentation and information is available. Review notes from previous evaluations and check to see if there are any performance issues that need to be addressed. Step 2: Set the Agenda Next, set an agenda for the evaluation. Identify the key areas you want to cover during the verbal portion of the evaluation, and prepare any questions you want to ask the employee. This will help keep the conversation focused and on track. Step 3: Hold the Evaluation Once you have prepared for the evaluation and set an agenda, it is time to hold the actual evaluation. Be sure to communicate clearly with the employee during the verbal portion of the evaluation and offer specific examples of their performance when possible. Step 4: Provide a Written Evaluation After the verbal portion of the evaluation is complete, it is time to complete the written portion of the evaluation. Be sure to include specific examples of the employee's performance and provide clear feedback on areas where improvement is needed. Step 5: Communicate Results to Executive Finally, it is important to communicate the results of the evaluation to the executive.
Learn more about annual evaluations here:
https://brainly.com/question/32614063
#SPJ11
The CFO is proposing that her company issues equity to reduce debt, because the company's current leverage ratio is 45% and the CFO believes that lower leverage will increase company value. The company's credit rating is BB. But a board member complained about this strategy, arguing that issuing equity will increase the number of shares outstanding and create dilution.
1) Who is right, the CFO or the board member?
2) Discuss. (2 paragraphs maximum)
The board member is right in expressing concerns about the potential dilution caused by issuing equity.
The board member's argument regarding the potential dilution resulting from issuing equity is valid. When a company gives additional shares, it increases the total number of shares outstanding. As a result, the ownership stake and earnings per share of existing shareholders can be diluted. This means that each existing share represents a smaller portion of the company, potentially decreasing the value of individual claims. Dilution can have various adverse effects on current shareholders. For instance, it can reduce their voting power and influence the company's decision-making processes. Additionally, diluted earnings per share can impact investor perception of the company's profitability and prospects, affecting the share price. Therefore, the board member's concern about the potential negative consequences of dilution on shareholder value is valid. While the CFO's perspective on reducing leverage to increase company value is reasonable, it is essential to carefully consider the implications of dilution and its impact on existing shareholders. Striking a balance between reducing debt and protecting shareholder interests is crucial in making decisions regarding equity issuance.
Learn more about Earnings Per Share here: https://brainly.com/question/28506840.
#SPJ11
The vendor of a property agrees to take back a $60,000 mortgage at a rate of 8% compounded semi-annually with monthly payments of $500 for a three-year term. Calculate the market value of the mortgage if financial institutions are charging 10% compounded semi-annually on three-year-term mortgages.
Question 1 options:
A. $41,557.55
B. $57,098.85
C. $60,000.00
D. $53,936.60
E. $59,111.11
The market value of the mortgage is approximately $15,697.45. None of the provided answer choices match the calculated value, so there seems to be an error in the options given.
To calculate the market value of the mortgage, we need to find the present value of the monthly payments using the rate charged by financial institutions.
1. Calculate the number of periods:
Since the mortgage has monthly payments for a three-year term, there are 3 years * 12 months = 36 periods.
2. Calculate the discount rate:
The rate charged by financial institutions is 10% compounded semi-annually. To convert it to a monthly rate, we divide it by 12 months = 10% / 12 = 0.8333% per month.
3. Calculate the present value of the monthly payments:
Using the formula for the present value of an ordinary annuity, we have:
PV = PMT * [(1 - (1 + r)⁽⁻ⁿ⁾) / r]
PV = $500 * [(1 - (1 + 0.008333)⁽⁻³⁶⁾) / 0.008333]
PV ≈ $15,697.45
Therefore, the market value of the mortgage is approximately $15,697.45. None of the provided answer choices match the calculated value, so there seems to be an error in the options given.
To know more about market value refer here:
https://brainly.com/question/32928913#
#SPJ11
cash is collected from customers in the following manner : month of sale 40%
month following the sale 60%
45% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
labor costs are 30% of sales. other operating costs are $33,000 per month (including $9000 of depreciation) both of these are pad in the month incurred.
the cash balance on March 1 is $10,000. a minimum cash balance of $6,000 is required at the end of the month . money can be borrowed in multiples of $ 1, 000.
How much cash will be paid to suppliers in March ?
The cash paid to suppliers in March will amount to $43,200.
To determine the cash paid to suppliers in March, we need to consider the payment terms for purchases and other operating costs.
Purchases:
- 45% of purchases are paid in cash in the month of purchase: 45% of total purchases.
- The balance is paid the following month: 55% of total purchases.
Other operating costs:
- Other operating costs, including depreciation, are paid in the month incurred: $33,000.
Given the information provided, we can calculate the cash paid to suppliers in March as follows:
Purchases:
- 45% of purchases paid in cash in the month of purchase: 45% × total purchases.
- Purchases paid the following month: 55% × total purchases.
Other operating costs:
- Other operating costs paid in the month incurred: $33,000.
Total cash paid to suppliers in March:
Cash paid to suppliers = (45% × total purchases) + (55% × total purchases) + $33,000
Since the specific amount of total purchases is not given, we cannot provide an exact figure. However, if we assume that total purchases are represented by "P," we can express the cash paid to suppliers in March as:
Cash paid to suppliers = (0.45P) + (0.55P) + $33,000
= 1P + $33,000
= P + $33,000
Therefore, the amount of cash paid to suppliers in March will be the total purchases (P) plus $33,000.
To learn more about payment Click Here: brainly.com/question/32320091
#SPJ11
Common stock value-Variable growth Newman Manufacturing is considering a cash purchase of the stock of Grips Tool. During the year just completed, Grips earned $4.12 per share and paid cash dividends of $2.42 per share (Do-$2.42) Grips' earnings and dividends are expected to grow at 20% per year for the next 3 years, after which they are expected to grow 6% per year to infinity. What is the maximum price per share that Newman should pay for Grips if it has a required return of 11% on investments with risk characteristics similar to those of Grips?
The maximum price per share that Newman should pay for Grips is $165.63.
To determine the maximum price per share that Newman should pay for Grips, we can use the dividend discount model (DDM) with variable growth rates. The formula for the DDM is as follows:
Stock Price = Dividend / (Required Return - Dividend Growth Rate)
First, let's calculate the dividends for the next 3 years using the expected growth rate of 20%:
Year 1 dividend: $4.12 * (1 + 0.20) = $4.94
Year 2 dividend: $4.94 * (1 + 0.20) = $5.93
Year 3 dividend: $5.93 * (1 + 0.20) = $7.12
From Year 4 onwards, the dividends are expected to grow at a rate of 6% per year. Let's calculate the Year 4 dividend:
Year 4 dividend: $7.12 * (1 + 0.06) = $7.54
Now, we can calculate the present value of these dividends using the required return of 11%:
PV of Year 1 dividend: $4.94 / (1 + 0.11) = $4.45
PV of Year 2 dividend: $5.93 / (1 + 0.11)^2 = $4.87
PV of Year 3 dividend: $7.12 / (1 + 0.11)^3 = $5.51
PV of Year 4 dividend: $7.54 / (0.11 - 0.06) = $150.80
Finally, we can calculate the maximum price per share by summing up the present values of the dividends:
Max Price per Share = $4.45 + $4.87 + $5.51 + $150.80 = $165.63
To know more about maximum price refer to-
https://brainly.com/question/29738374
#SPJ11
"The defendants argued in the case that, in order to find a duty to third parties, an accountant must have contemplated a specific transaction for which the financial statement would be used and that no such transaction was contemplated here. Do you agree with this statements from the perspective of auditors’ third party liability? Why or why not?"
I disagree with the assertion made regarding the assertions in light of the auditors' third-party liability.
If a third party is involved, it is the auditor's responsibility to get external confirmation from that party. The accountant should think carefully about any accounts that the auditor may find troubling. The accountant is unable to make a determination on the veracity of the statements. His responsibility is to follow the law, do accounting, and provide all the data to the auditors as needed.
Financial statements are documents that describe a company's operations and financial performance. Government organizations, accounting companies, etc. frequently audit financial accounts to guarantee accuracy and for tax, financing, or investment purposes.
Learn more about accounting here:
https://brainly.com/question/29437263
#SPJ4
Wang Corporation issued 800 shares of $50 par value common stock for $60 per share. Which of the following journal entries is recorded correctly?
O DR: Common Stock $40,000 and Additional Paid-In C apital from Common Stock $8,000; CR: Cash $48,000
O DR. Common Stock $48,000: CR: Cash $48,000
O DR: Cash $48,000; CR: Common Stock $40,000 and Additional Paid-In Capital from Common Stock $8,000
O DR: Cash $40,000; CR: Common Stock $40,000
O DR: Cash $48,000; CR: Common Stock $48,000
DR: Cash $48,000, CR: Common Stock $40,000, CR: Additional Paid-In Capital from Common Stock $8,000 is the correct journal entry to record the issuance of 800 shares of $50 par value common stock for $60 per share. Thus, option C is correct.
The correct journal entry for the transaction would be:
DR: Cash $48,000
CR: Common Stock $40,000
CR: Additional Paid-In Capital from Common Stock $8,000
This option is correctly recorded because it reflects the issuance of 800 shares of $50 par value common stock at a price of $60 per share. The total cash received from the issuance is calculated as 800 shares * $60 per share, resulting in $48,000.
The common stock account is credited for the par value of the shares, which is 800 shares * $50 par value per share, totaling $40,000. The additional paid-in capital from common stock account is credited for the excess amount received over the par value, which is $8,000 ($48,000 cash received - $40,000 par value credited).
This journal entry accurately reflects the transaction by recording the appropriate amounts in the cash account, common stock account, and additional paid-in capital account.
In conclusion, option:
DR: Cash $48,000
CR: Common Stock $40,000
CR: Additional Paid-In Capital from Common Stock $8,000
is the correct journal entry to record the issuance of 800 shares of $50 par value common stock for $60 per share. Thus, option C is correct.
To know more about journal entry refer here:
https://brainly.com/question/33067147#
#SPJ11
USD.700,000 by providing 70% of the capital based on the Musharakah contract. At the end of the first year, the project value declined by 40%. (7Marks) a) Determine the Capital loss after First Year b) if the project is abandoned leading to the termination of the Musharakah contract, the IFI claims should be only?
After the first year, the capital loss amounts to USD 280,000, and if the project is abandoned, the IFI's claim would be USD 196,000 based on their capital contribution and the terms of the Musharakah contract.
a) To determine the capital loss after the first year, we need to calculate 40% of the initial capital of USD 700,000.
Capital loss = 40% * USD 700,000
= 0.4 * USD 700,000
= USD 280,000
Therefore, the capital loss after the first year is USD 280,000.
b) If the project is abandoned and the Musharakah contract is terminated, the claim by the Islamic Financial Institution (IFI) would depend on the terms of the contract. Typically, in a Musharakah contract, the loss is shared between the partners in proportion to their capital contribution.
In this case, the IFI provided 70% of the capital, so their claim would be 70% of the total capital loss.
Claim by IFI = 70% * USD 280,000
= 0.7 * USD 280,000
= USD 196,000
Therefore, if the project is abandoned and the Musharakah contract is terminated, the claim by the IFI would be USD 196,000.
It's important to note that the specific terms and conditions of the Musharakah contract may vary, and the calculation may differ based on the contractual agreement between the parties involved.
In conclusion, the capital loss is USD 280,000 after the first year, and if the project is abandoned, the IFI's claim would be USD 196,000 in accordance with their capital contribution and the conditions of the Musharakah contract.
To know more about capital loss refer here:
https://brainly.com/question/31774133#
#SPJ11
Yellowstone Company began operations on January 1 to produce a single product. It used an absorption costing system with a planned production volume of 100,000 units. During its first year of operations, the planned production volume was achieved, and there were no fixed selling or administrative expenses. Inventory on December 31 was 20,000 units, and operating income for the year was $240,000.
Required:
1. If Yellowstone Company had used variable costing, its operating income would have been$220,000. Compute the break-even point in units under variable costing.
2. Draw a profit-volume graph for Yellowstone Company. (Use variable costing.)
Break-even point in units under variable costing:If the Yellowstone Company had used variable costing, its operating income would have been $220,000.
Therefore, variable cost = Operating income - Fixed cost Variable cost = $220,000 + 0 (fixed selling and administrative expenses) = $220,000 Contribution margin = Sales revenue - Variable cost Contribution margin per unit = Contribution margin ÷ Number of units Contribution margin per unit = ($240,000 ÷ 100,000 units) = $2.40.
Break-even point = Total fixed cost ÷ Contribution margin per unit Total fixed cost = 240,000 - 220,000 = $20,000 Break-even point = $20,000 ÷ $2.40 per unit = 8,333.33 units. Answer: 8334 units.
To know more about Break even point visit-
https://brainly.com/question/32507413
#SPJ11
If you presently have 40,000 dollars invested at a rate of 21
percent, compounded annually, how many years, to the closest year,
will it take for your investment to triple? It must triple.
It will take approximately 7 years for your investment to triple if you currently have $40,000 invested at a rate of 21 percent, compounded annually.
To calculate the number of years required for your investment to triple, we can use the formula for compound interest:
[tex]A = P(1 + r/n)^(nt)[/tex]
Where:
A = Final amount (triple the initial investment)
P = Principal amount (initial investment)
r = Annual interest rate (21% or 0.21)
n = Number of times the interest is compounded per year (assuming once per year)
t = Number of years
In this case, we want the final amount (A) to be three times the initial investment (3P):
3P = P(1 + 0.21/1)^(1*t)
Canceling out the P:
[tex]3 = (1.21)^t[/tex]
To solve for t, we can take the logarithm of both side[tex]A = P(1 + r/n)^(nt)[/tex]s of the equation:
[tex]log(3) = log(1.21)^t[/tex]
Using the logarithm property log(a^b) = b*log(a):
log(3) = t * log(1.21)
Now, we can solve for t by dividing both sides of the equation by log(1.21):
t = log(3) / log(1.21)
Calculating this value, we find that t is approximately 7 years (rounded to the closest year). Therefore, it will take around 7 years for your investment to triple at an annual interest rate of 21 percent, compounded annually.
Learn more about investment here
https://brainly.com/question/29547577
#SPJ11
