Parallel accounting refers to the process of preparing a company's financial statement using two different accounting principles, including GAAP, IFRS, and HCB. On the other hand, general ledger accounting is the record of all financial transactions that occur within an organization. Account numbers #100,000 and #329,000 are used in general ledger accounting for assets and liabilities, respectively, while figures 3-13 and 3-14 illustrate the structure of the general ledger.
Parallel accounting involves preparing a company's financial statement using two different accounting principles simultaneously. Generally, companies use the Generally Accepted Accounting Principles (GAAP) for their financial statement as it is the standard accounting principle in the United States. International Financial Reporting Standards (IFRS) is a global accounting principle and is used in most parts of the world, except the United States. Harmonization of International Accounting Standards and German Accounting Standards (HGB) is used for accounting in Germany. A company may choose to adopt two accounting principles due to various reasons such as mergers and acquisitions, different regulations, or for compliance purposes. General ledger accounting is a process of recording all financial transactions that occur within an organization. The general ledger serves as the backbone of an organization's financial accounting system. Account number #100,000 is used in the general ledger accounting for assets, while account number #329,000 is used for liabilities. The general ledger accounting system helps organizations keep track of their financial transactions, ensuring that their accounts are up to date. Figures 3-13 and 3-14 illustrate the structure of the general ledger, which includes accounts for assets, liabilities, equity, revenues, and expenses. Overall, parallel accounting and general ledger accounting are essential components of a company's financial accounting system, and they help organizations maintain accurate financial records. Companies must maintain proper accounting records as they help them make informed financial decisions, comply with regulatory requirements, and communicate their financial performance to stakeholders.
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which of the following are the four geographic regions in which the company is currently selling its action cameras and UAV drones?
a)Europe, Africa, Latic America, Asia Pacific, and South America
b) The European Union, North America, Southeast Asia, and Latic America
c)Latic America, Asia Pacific, Europe-Africa, and North America
d)South America, Western and Eastern Europe, China-Japan, and North America
e) North America, Asia, Euroup, and Africa
The four geographic regions in which the company is currently selling its action cameras and UAV drones is option (d) South America, Western and Eastern Europe, China-Japan, and North America.
The company is currently selling its action cameras and UAV drones in four geographic regions: South America, Western and Eastern Europe, China-Japan, and North America. These regions represent the market areas where the company has chosen to distribute its products.
South America is one of the regions where the company is selling its products, indicating its presence and market reach in countries within the South American continent. Western and Eastern Europe are also included, highlighting the company's market penetration in European countries.
China-Japan represents the company's presence in the Asian market, specifically targeting customers in China and Japan. Lastly, North America encompasses the company's sales and distribution operations in countries within the continent, such as the United States and Canada.
By strategically targeting these specific geographic regions, the company can effectively reach its target audience and capitalize on the demand for action cameras and UAV drones in these markets. This distribution strategy allows the company to expand its customer base and maximize sales potential in key regions worldwide.
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a salesperson presents an offer to buy a property that includes stipulation that the buyer will purchase by "taking subject to the existing loan." which of the following should the salesperson make certain that the sellers know about this clause when they review the offer?
The buyer will not be personally liable for payment of the debt and the sellers should discuss the matter with their attorney before making a decision on the offer
It is a common and perfectly acceptable financing method
It offers the sellers no protection and should not be accepted under any circumstances
It is the best protection the sellers can have when a mortgage assumption is involved because it means that the buyer becomes liable for payment of the debt
When reviewing an offer that includes a clause stating that the buyer will purchase the property "taking subject to the existing loan," the salesperson should make certain that the sellers know the following: The buyer will not be personally liable for payment of the debt, and the sellers should discuss the matter with their attorney before making a decision on the offer.
The clause "taking subject to the existing loan" means that the buyer will assume the responsibility for the existing mortgage without becoming personally liable for its repayment. This clause is a common and acceptable financing method in real estate transactions. However, it is important for the sellers to understand that by accepting this clause, they may lose direct control over the mortgage payments and the property's financial obligations.
Therefore, it is advisable for the sellers to consult with their attorney to fully understand the implications and potential risks associated with this financing method before making a decision on the offer. Their attorney can provide guidance on whether accepting the clause is in their best interest and ensure that their rights and interests are protected throughout the transaction.
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A European call written on shares has strike price $12 and expires in six time steps. Using CRR notation, the underlying share prices are calculated using S=$14,u=1.2 and d=1/u. The return on a bank investment over each time step is R=1.05 Find the premium of an American put. Might a holder consider exercising the American put at any time prior to expiry? Explain why or why not. And if so, identify those nodes at which the holder might consider exercising the American put prior to expiry.
To determine the premium of an American put option, we need to use the CRR (Cox-Ross-Rubinstein) model. Given the strike price, underlying share prices, return on a bank investment, and the expiration period, we can calculate the option premium.
Using the CRR model, we can calculate the option premium by working backward from the expiration date. At each node, we compare the exercise price with the expected payoff to determine the option value.
The premium of an American put option is the maximum value between the exercise price and the expected payoff at each node.
As for early exercise, the holder of an American put option has the right to exercise the option at any time prior to expiry.
Whether the holder will exercise the option early depends on the comparison of the option value with the current underlying asset price.
If the option value is greater than the current asset price, the holder may consider exercising the option to benefit from the downside protection. However, if the option value is lower than the current asset price, it would be more favorable for the holder to hold the option until expiry.
The nodes at which the holder might consider exercising the American put option prior to expiry are those where the option value exceeds the current asset price.
At these nodes, the holder can lock in the profit by exercising the option and selling the underlying asset at the higher exercise price.
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A company that does consulting calculates the total cost for doing a job using a combination of the
consulting time spent with the client at a rate of $62 per hour, plus overhead allocated at a rate of
$20 per consulting hour. The total consulting hours estimated for the year is 5,000 hours.
The company is considering using activity-based costing (ABC) to allocate overhead. All overhead
costs can be assigned to the following activities:
Activity
Travel to jobs
Reporting
Job support
Estimated Activity
7.500 kilometres (km)
300 reports
2.000 support hours
Activity Rate
$2.50/km
$18/report
$22/hr
The company completed a job for a client using a total of 49 consulting hours. In addition, the job
required total travel of 172 kilometres, total job support of 16 hours, and preparation of three
reports.
Required:
1. Determine the total cost of the job using the traditional costing system. (2 marks)
2. Determine the total cost of the job using the ABC system. (4 marks)
3. For this job, which method of applying overhead results in a higher profit if the selling price
is the same for both methods? How much higher will the profit be? (2 marks)
4. Calculate the price charged to the client for this job if the company uses a 30% markup of
O
Up
15°C Sunny
A
: Required:
1. Determine the total cost of the job using the traditional costing system. (2 marks)
2. Determine the total cost of the job using the ABC system. (4 marks)
3. For this job, which method of applying overhead results in a higher profit if the selling price
is the same for both methods? How much higher will the profit be? (2 marks)
4. Calculate the price charged to the client for this job if the company uses a 30% markup of
the ABC cost. (1 mark)
5. For a manufacturing company, why is ABC usually not acceptable for external reporting that
follows Generally Accepted Accounting Principles (GAP)? (1 mark)
The total cost of the job using traditional costing is determined by multiplying consulting hours by the rate per hour and adding allocated overhead based on those hours.
The total cost of the job using activity-based costing (ABC) is calculated by multiplying actual activity usage by their respective activity rates and adding the consulting hours.
To determine the method resulting in higher profit, compare the total costs calculated using both systems, and the method with lower total cost will yield higher profit.
1 The traditional costing system calculates the total cost of the job by multiplying the consulting hours (49 hours) by the rate per hour ($62) and adding the overhead allocated based on the consulting hours (49 hours x $20).
2 The ABC system calculates the total cost of the job by multiplying the actual activity usage for each activity (172 km, 3 reports, 16 hours) by their respective activity rates ($2.50/km, $18/report, $22/hr), and adding the consulting hours (49 hours x $62).
3 To determine the method with a higher profit, the difference between the total costs calculated using the two systems should be compared. The method with the lower total cost will result in higher profit. The difference in profit can be calculated by subtracting the total cost under the lower-cost method from the total cost under the higher-cost method.
4 To calculate the price charged to the client using a 30% markup of the ABC cost, the total cost under the ABC system needs to be multiplied by 1.30. This will account for the desired markup and provide the price to be charged to the client.
ABC is usually not acceptable for external reporting that follows Generally Accepted Accounting Principles (GAAP) for a manufacturing company because it provides more detailed and specific cost allocation, which may not align with the broader and aggregated cost allocation required by GAAP. GAAP focuses on providing a more general view of costs for external reporting purposes, and absorption costing is commonly used for that purpose.
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Desiree currently works as a manager of an electronics store earning an annual salary of $50,000. She noticed an internal job opening for a regional manager that pays $100,000 salary, but an MBA is required for consideration. The cost for a full-time MBA program in two years is $60,000. What is her opportunity cost for attending graduate school, without consideration for time value of money
Desiree's opportunity cost for attending graduate school is the forgone salary she would have earned as a regional manager during the two years of the MBA program. The opportunity cost can be calculated by subtracting the potential salary she would earn as a regional manager from the total cost of the MBA program.
Desiree's current salary as a manager is $50,000 per year. If she pursues the MBA program, she would forego two years of employment and the corresponding salary. The potential salary as a regional manager is $100,000 per year. Therefore, the opportunity cost of attending graduate school would be $100,000 per year multiplied by two years, totaling $200,000.
The opportunity cost in this case represents the value of the best alternative that Desiree is giving up by choosing to attend graduate school. It reflects the potential earnings she would have received as a regional manager if she did not pursue the MBA program. By considering the opportunity cost, Desiree can assess the financial impact of her decision to pursue further education.
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Assume that a maker of coffee pods has a total cost function given by the following: \[ \mathrm{TC}=191+4 \mathrm{q}^{2} \] What is the value of marginal cost when output equals \( 19 ? \)
The value of the marginal cost when the output is 19 is calculated as 152.
To find the marginal cost when the output is 19, we need to calculate the derivative of the total cost (TC) function with respect to the quantity (q) and then substitute q = 19 into the derivative.
Given the total cost function: TC = 191 + 4q²
To find the marginal cost (MC), we take the derivative of the total cost function with respect to q:
MC = d(TC)/dq
Differentiating the total cost function with respect to q:
MC = d/dq (191 + 4q²)
MC = 0 + 8q
MC = 8q
Now, substitute q = 19 into the marginal cost function:
MC(q=19) = 8(19)
MC(q=19) = 152
Therefore, the value of the marginal cost when the output is 19 is 152.
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business stat
question:
A company is creating three new divisions and 17 managers are
eligible to be appointed head of a division. How many different
ways could the
three new heads be appointed?
The total number of ways the three new directors can be appointed is nCr = n!/r!(n - r)! = 17C3= 680.
Given that a company is creating three new divisions and 17 managers are eligible to be appointed head of a division. We need to determine the number of different ways that the three new heads be appointed.
The number of ways of choosing r things from n different things, without regard to order, is given by the formula:
nCr = n!/r!(n - r)!
Where n = 17 and
r = 3
There are 17 ways to choose the first division head, 16 ways left to choose the second division head, and 15 ways left to choose the third division head.
However, since order doesn't matter, we need to divide by the number of ways to order the three division heads, which is 3! (or 6).
Answer: 680.
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The business rules and instructions for creating your ERD:
Each study group member is expected to attend all voice channel meetings. For each voice channel meeting to go ahead, several study group members must register to attend it. Every voice channel meeting is identified by a study group ID. The date, time, topic and voice channel are also kept in the system for each study group meeting. Each study group member is identified by a member ID (not student number). For each member, the member’s first and last names, gender, course, year, Snapcode, computing strength, email and mobile number are recorded in the system. The computing strength attribute has attributes of its own including computing area, level of strength (e.g. low, medium, and high) and currency (eg. current and out-of-date). Each study group member has only one computing strength. An important study group meeting detail is that the system also takes note of the members who attended each meeting and the action items agreed upon at each meeting. Each meeting detail includes one or more actions items. Each action item is characterised by a task, when the task is to be completed (date) and by who (one of the members).
Create an ERD that represents the entities, attributes, the relationships between entities, and the cardinality and optionality of each relationship that are described by these business rules.
I can provide guidance on how to create an ERD that represents the entities, attributes, relationships, and cardinalities described in the given business rules. Based on the given information, the entities in this ERD would be:
Study groupVoice channel meetingStudy group memberComputing strengthAction itemThe attributes of each entity are:
Study group: study group IDVoice channel meeting: date, time, topic, voice channelStudy group member: member ID, first name, last name, gender, course, year, Snapcode, email, mobile numberComputing strength: computing area, level of strength, currencyAction item: task, completion date, assigned memberThe relationships between entities are:
A study group has multiple voice channel meetings (one-to-many)A voice channel meeting can have multiple study group members in attendance, and a study group member can attend multiple meetings (many-to-many)A study group member has one computing strength, and a computing strength belongs to one study group member (one-to-one)A voice channel meeting has multiple action items, and an action item belongs to one voice channel meeting (one-to-many)An action item can be assigned to one study group member, and a study group member can be assigned multiple action items (one-to-many)The cardinalities and optionality of each relationship are:
Study group to voice channel meeting: one study group must have at least one voice channel meeting (mandatory), but a voice channel meeting can exist without a study group (optional)Voice channel meeting to study group member: a voice channel meeting can have many study group members attending (optional), and a study group member can attend many voice channel meetings (optional)Study group member to computing strength: a study group member must have one computing strength (mandatory), and a computing strength can only belong to one study group member (mandatory)Voice channel meeting to action item: a voice channel meeting must have at least one action item (mandatory), but an action item can exist without a voice channel meeting (optional)Action item to study group member: an action item must be assigned to one study group member (mandatory), but a study group member can have zero or many action items assigned (optional)Based on this information, you can create an ERD that accurately represents the entities, attributes, relationships, and cardinalities described in the given business rules.
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APPLICATION Q1) A manufacturer of furniture makes two products - chairs and tables. Processing of this product is done on two machines A and B. A chair requires 2 hours on machine A and 6 hours on machine B. A table requires 5 hours on machine A and no time on machine B. There are 16 hours of time per day available on machine A and 30 hours on machine B. Profit gained by the manufacturer from a chair and a table is Rs 2 and Rs 10 respectively. What should be the daily production of each of two products? (13 pts)
The optimal daily production should be:
- Chairs: 0
- Tables: 1
To solve this problem, we need to determine the optimal daily production of chairs and tables that maximizes the manufacturer's profit while considering the available machine hours.
Let's assume:
x = number of chairs produced per day
y = number of tables produced per day
We are given the following information:
Chair processing times:
2 hours on machine A
6 hours on machine B
Table processing times:
5 hours on machine A
No time on machine B
Available machine hours:
16 hours on machine A
30 hours on machine B
Profit per chair = Rs 2
Profit per table = Rs 10
We need to maximize the profit function:
Profit = 2x + 10y
Subject to the following constraints:
2x + 5y ≤ 16 (constraint for machine A)
6x ≤ 30 (constraint for machine B)
x, y ≥ 0 (non-negativity constraint)
To solve this linear programming problem, we can use graphical or algebraic methods. Let's use the algebraic method of solving linear programming problems.
We have the following system of inequalities:
2x + 5y ≤ 16
6x ≤ 30
x, y ≥ 0
To find the optimal solution, we need to find the intersection point of the two constraints:
Solving the first constraint:
2x + 5y = 16
y = (16 - 2x)/5
Substituting this into the second constraint:
6x ≤ 30
x ≤ 5
Now we can check the feasible region by testing different values of x and y within the given constraints.
Let's consider some possible values:
1. x = 0, y = 0
2. x = 0, y = 1
3. x = 5, y = 0
Evaluating the profit function for these values:
1. Profit = 2(0) + 10(0) = 0
2. Profit = 2(0) + 10(1) = 10
3. Profit = 2(5) + 10(0) = 10
From the above calculations, we can see that the maximum profit is achieved when x = 0 and y = 1, which corresponds to producing 1 table per day.
Therefore, the optimal daily production should be:
- Chairs: 0
- Tables: 1
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1. The method of recording inventory at net realizable cost that substitutes the net realizable cost for the historical cost and reports the loss as a part of cost of goods sold is the:
O loss method.
O replacement method.
O gross profit method.
O cost of goods sold method.
The method of recording inventory at net realizable cost that substitutes the net realizable cost for the historical cost and reports the loss as a part of cost of goods sold is the gross profit method.
The gross profit method is commonly used when the net realizable value (estimated selling price minus estimated costs of completion, disposal, and transportation) of the inventory is lower than its historical cost. Under this method, the inventory is initially recorded at its original cost but is adjusted to its net realizable value at the end of the reporting period. The adjustment is made by recognizing a loss in the cost of goods sold, reflecting the decrease in value between the historical cost and the net realizable cost. This approach provides a more conservative valuation of inventory and ensures that potential losses are properly recognized in the financial statements.
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With regards to a firms product line, a cost leadership strategy would strive for _______ while a differentiation strategy would strive for ________.
Multiple Choice
a Wide variety; limited selection
b Broad cross section of the market; focused section of the market
c Limited selection; wide variety
d Focused section of the market; broad cross section of the market
e None of these answers are correct
The correct answer is: a) Wide variety; limited selection. A cost leadership strategy aims to provide products or services at a lower cost compared to competitors.
To achieve cost leadership, businesses often streamline their operations, optimize efficiency, and focus on economies of scale. Offering a wide variety of products may increase production and operational complexity, potentially leading to higher costs. Therefore, a cost leadership strategy typically emphasizes a limited selection of standardized products to minimize costs and maximize economies of scale.
On the other hand, a differentiation strategy focuses on offering unique and distinctive products or services that stand out in the market. This strategy aims to create a competitive advantage through features, quality, innovation, or customer experience.
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A. APM – Value-based Purchasing
Definition.
Expected Provider Behavior Change
B. Capitation Payments
Definition
Expected Provider Behavior Change
C. Summary"
Value-based purchasing and capitation payments are payment models in healthcare that promote a shift in provider behavior towards delivering high-quality, cost-effective care. These models encourage providers to focus on prevention, coordination, and evidence-based practices to improve patient outcomes and control costs.
A. APM - Value-based Purchasing: A value-based purchasing (APM) model is a healthcare payment approach where providers are reimbursed based on the value and quality of care they deliver, rather than the traditional fee-for-service model. It encourages providers to focus on improving patient outcomes and reducing costs. The expected behavior change among providers is to prioritize preventive care, coordinate care across different settings, and adopt evidence-based practices to achieve better patient outcomes and cost savings.
B. Capitation Payments: Capitation payments are a method of reimbursement in which healthcare providers receive a fixed amount per patient, typically on a monthly basis, regardless of the services provided. This payment model aims to control costs by incentivizing providers to deliver efficient and cost-effective care. The expected behavior change among providers is to manage the health of their patient population proactively, promote preventive care, and carefully manage resources to meet the needs of patients within the allocated budget.
C. Summary: Value-based purchasing and capitation payments are alternative payment models in healthcare that aim to align provider incentives with improved patient outcomes and cost containment. Value-based purchasing focuses on rewarding providers based on the value and quality of care delivered, while capitation payments provide a fixed amount per patient. Both models seek to drive behavior change among providers by emphasizing preventive care, care coordination, and efficient resource utilization to achieve better outcomes and cost savings.
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When calculating the money-weighted rate of return for a short-term investment portfolio, which of the following should be treated as a cash outflow?
Select one:
a. Funds received from maturing securities
b. Initial market value of the short-term investment portfolio
c. Funds used to purchase securities to include in the short-term investment portfolio
d. Both "Initial market value of the short-term investment portfolio" and "Funds used to purchase securities to include in the short-term investment portfolio"
When calculating the money-weighted rate of return for a short-term investment portfolio , Option d is correct
d. Both "Initial market value of the short-term investment portfolio" and "Funds used to purchase securities to include in the short-term investment portfolio" should be treated as cash outflows when calculating the money-weighted rate of return for a short-term investment portfolio.
The money-weighted rate of return takes into account the timing and amount of cash flows into and out of the portfolio. In the case of a short-term investment portfolio, the initial market value of the portfolio represents the cash outflow when the investment is made. Additionally, any funds used to purchase securities to include in the portfolio should also be considered as cash outflows.
By including these cash outflows in the calculation, the money-weighted rate of return reflects the impact of the timing and size of the investments made. This approach provides a measure of the actual performance of the portfolio that takes into account the investor's cash flow decisions.
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Which of the following best describes the current financial planning engagement?
a. The financial planner should issue a new engagement letter for this project.
b. The financial planner is required to provide the same advice to Autumn and Chase since they are both clients.
c. The financial planner does not need to issue a new engagement letter since Autumn is a previous client.
d. It is part of the engagement with Chase and Autumn as step 6 is monitoring the plan.
The best description of the current financial planning engagement is option c: The financial planner does not need to issue a new engagement letter since Autumn is a previous client.
The current financial planning engagement involves Autumn, who is a previous client of the financial planner. Since Autumn has sought the financial planner's assistance in the past, there is no need to issue a new engagement letter for this project. The engagement letter serves as a formal agreement between the client and the financial planner, outlining the scope of the engagement, responsibilities, and terms of service. In this case, Autumn's previous engagement with the financial planner covers the current planning needs, and therefore, a new engagement letter is not required.
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Why might a CEO have an incentive to drive his company's stock price down? Is there evidence that CEOs might do this on any systematic basis? If so, describe it.
CEOs might have an incentive to drive their company's stock price down for various reasons, such as facilitating stock buybacks, maximizing executive compensation through stock options, or creating investment opportunities for themselves or other insiders.
One possible reason a CEO may have an incentive to drive down the company's stock price is to facilitate stock buybacks. By artificially lowering the stock price, the company can repurchase its own shares at a lower cost, effectively increasing the value of the remaining shares.
Another reason is related to executive compensation. CEOs often receive stock options as part of their compensation package, which allows them to purchase company stock at a predetermined price.
Additionally, CEOs might intentionally drive down the stock price to create investment opportunities for themselves or other insiders.
While there have been cases of CEOs engaging in practices that manipulate stock prices, it is not a systematic phenomenon. Such practices are often subject to regulatory scrutiny and legal consequences due to their potential for market manipulation and shareholder harm.
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Suppose that a firm has estimated its demand curve as q = 172,864 - 59*q, where P is the price per unit and q is the quantity of units produced. What is the firm's marginal revenue equal to when it produces 2,786 units? Please round to two decimal places. (Hint: this is the demand, not the inverse demand!)
We need to multiply the derivative of the demand function with respect to quantity (q) in order to determine the marginal revenue. q = 172,864 - 59q is the formula for the demand function. We get -59 when we take this function's derivative with regard to q. Therefore, when the company produces 2,786 units, the marginal revenue is equal to -592,786 = -$164,774
Demand in economics refers to a consumer's desire to buy products and services as well as their readiness to pay a given price for them. The amount requested of an item or service often decreases as its price rises. The amount required will rise in response to a drop in the cost of a commodity or service.
Because it makes sense and organically happens throughout nearly any day, demand is a concept that both consumers and businesses are highly acquainted with. Customers who are keeping an eye on particular things, for instance, could buy more of them when the prices are low.
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(Variable Consideration) Bai Biotech enters into a licensing agreement with Pang Pharmaceutical for a drug under development. Bai will receive a payment of ¥10,000,000 if the drug receives regulatory approval. Based on prior experience in the drug-approval process, Bai determines it is 90% likely that the drug will gain approval and a 10\% chance of denial.
Instructions
(a) Determine the transaction price of the arrangement for Bai Biotech.
(b) Assuming that regulatory approval was granted on December 20, 2015, and that Bai received the payment from Pang on January 15, 2016, prepare the journal entries for Bai.
(a) The transaction price of the arrangement for Bai Biotech is ¥9,000,000. This amount is calculated by multiplying the potential payment of ¥10,000,000 by the probability of regulatory approval (90%).
(b) The journal entries for Bai Biotech are as follows:
On December 20, 2015 (when regulatory approval was granted):
Debit: Accounts Receivable ¥9,000,000
Credit: Revenue ¥9,000,000
On January 15, 2016 (when Bai received the payment from Pang):
Debit: Cash ¥9,000,000
Credit: Accounts Receivable ¥9,000,000
(a) To determine the transaction price of the arrangement, Bai Biotech multiplies the potential payment of ¥10,000,000 by the probability of regulatory approval (90%). ¥10,000,000 * 0.90 = ¥9,000,000. Therefore, the transaction price of the arrangement for Bai Biotech is ¥9,000,000.
(b) On December 20, 2015, when regulatory approval was granted, Bai recognizes the revenue related to the licensing agreement. The journal entry debits Accounts Receivable for ¥9,000,000 (representing the amount to be received from Pang) and credits Revenue for ¥9,000,000.
On January 15, 2016, when Bai receives the payment from Pang, the journal entry reflects the receipt of cash. The entry debits Cash for ¥9,000,000 and credits Accounts Receivable for ¥9,000,000, completing the transaction and reflecting the collection of the payment.
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Capturing Value from the customers: (The students are required to analyse how the
company can capture the value from the customers and then to explain how the company generates continuous profit from the customers. The students also need to give some factor contributing to the strong customer relationship of the customer).
To capture value from customers and generate continuous profit, a company needs to focus on several key strategies. Firstly, understanding customer needs and preferences is essential. By conducting market research and gathering customer feedback, the company can tailor its products and services to meet those needs effectively. This customization creates value for customers and increases their willingness to pay.
Additionally, the company can differentiate itself from competitors by offering unique features, innovative solutions, or exceptional customer service. This differentiation builds customer loyalty and reduces the likelihood of customers switching to competitors.
Furthermore, implementing customer retention programs, such as loyalty rewards, exclusive offers, or personalized experiences, can strengthen the customer relationship and drive repeat business. By nurturing strong customer relationships, the company can benefit from customer referrals and positive word-of-mouth, further contributing to continuous profitability.
Factors that contribute to strong customer relationships include trust and reliability. By consistently delivering on promises and providing high-quality products and services, the company establishes a reputation for reliability, which builds customer trust. Open and transparent communication, actively seeking customer feedback, and promptly addressing customer concerns are also important factors in building strong customer relationships.
By effectively capturing customer value, building strong relationships, and continuously meeting customer needs, a company can generate continuous profit by retaining loyal customers and attracting new ones through positive customer experiences and referrals.
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Crane Ltd. wished to purchase some new equipment for its factory. However, due to recent cash flow difficulties, Crane did not have enough cash on hand to complete the transaction. The equipment’s vendor agreed to accept 1,350 common shares in Crane in exchange for the equipment. Crane’s shares were actively trading at $14.50/share on the day of the exchange.
Prepare the journal entry to record the purchase of the equipment on Crane’s books, assuming the list price for the equipment was $21,455
The journal entry to record the purchase of the equipment on Crane's books would be a debit to Equipment for $21,455 and a credit to Common Shares for 1,350 shares at $14.50 per share.
When Crane Ltd. exchanges 1,350 common shares for equipment with a list price of $21,455, the transaction needs to be recorded in the company's books. The equipment acquired is considered an asset and will be recorded at its list price.
The journal entry would be as follows:
Debit: Equipment - $21,455
Credit: Common Shares - 1,350 shares * $14.50/share = $19,575
The debit to Equipment reflects the increase in the value of the asset, while the credit to Common Shares reflects the decrease in the company's shares issued and the corresponding value of those shares. The difference between the list price of the equipment and the credit to Common Shares represents the gain or loss on the transaction, which is not specified in the given information.
It is important to note that the actual fair value of the common shares at the time of the exchange is used for the journal entry. In this case, the shares were actively trading at $14.50 per share.
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- What impact did competitors target market choices have on your strategy? - What impact did competitors marketing mix (product, pricing, distribution, promotion) decisions have on your strategy? - What role did competitive intelligence play in your decision making?
Competitive intelligence also allows you to identify new trends in the market, which you can then use to adjust your strategy and stay ahead of the competition.
The impact of competitors' target market choices, marketing mix decisions, and competitive intelligence on your strategy:Competitor target market choices impact on your strategy:In a competitive business environment, it is crucial to stay aware of the target market choices of your competitors. Competitor target market choices impact your strategy because you need to adjust your product and service offerings to align with the needs and preferences of your target audience.
This involves analyzing your competitors' target market choices to understand their strengths and weaknesses and identify opportunities to gain a competitive advantage. This also helps you to adapt to changing market conditions and stay ahead of your competition.Competitor marketing mix decisions impact on your strategy:Competitors' marketing mix decisions, such as product, pricing, distribution, and promotion, can have a significant impact on your strategy.
You must analyze your competitors' marketing mix decisions to stay ahead of the competition, understand their strengths and weaknesses, and identify opportunities to gain a competitive advantage. By analyzing your competitors' pricing strategies, you can adjust your prices accordingly and make sure you are not underselling your product or service. Analyzing the distribution channels used by your competitors will help you to ensure that you are reaching your target audience in the most effective way possible.
Additionally, analyzing your competitors' promotional strategies will help you to identify new and innovative ways to market your product or service and stay ahead of the competition.Competitive intelligence role in your decision making:Competitive intelligence is essential for making informed decisions in a competitive business environment. Competitive intelligence provides insights into your competitors' strengths and weaknesses, as well as the opportunities and threats they face.
By using competitive intelligence to analyze the market and your competitors, you can make informed decisions that will help you stay ahead of the competition. This will involve gathering information on your competitors, analyzing this information, and using it to create an effective strategy that will give you a competitive advantage. Competitive intelligence also allows you to identify new trends in the market, which you can then use to adjust your strategy and stay ahead of the competition.
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1.What is an EFT? Why are more companies increasingly using them?
2.There are several reasons why your books (cash account) and your bank statement do not have the same balance. (b) Name three and explain each.
1. An EFT is a digital method of transferring funds from one bank account to another electronically. More companies are using EFTs because they are convenient, and provide faster transaction processing compare traditional paper-based methods.
Three reasons why the cash account balance and the bank statement balance may not match are:
(a) Outstanding checks: These are check issued by the company but not yet presented to bank for payment, resulting in a lower bank balance.
(b) Deposits in transit: These are cash or checks received by the company but not yet processed by the bank, leading to a higher cash account balance.
(c) Bank service charges or fees: These charges deducted by the bank can reduce the bank balance compared to the cash account balance.
Funds refer to monetary resources that are available for a specific purpose, such as investment, operations, or projects. They can come from various sources, including investors, shareholders, lenders, or internal company reserves.
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Multiple Chalce Paytack period itanores the 1 ining of casis fows and the sosh frown aftor the poybock Paybsck period ignores the cash flows after the paybock Paybock period ignores the timing of cash fiaws Payback period is a good way to moke copial biggeting decisions because some businesses use 4 and it is easy to understand
The payback period is a capital budgeting technique that ignores the timing of cash flows and only considers the time it takes to recover the initial investment.
It does not take into account the cash flows that occur after the payback period. While some businesses use the payback period because it is easy to understand, it has limitations as a decision-making tool. This method fails to consider the time value of money and does not provide a comprehensive analysis of the profitability or risk associated with an investment.
The payback period is calculated by dividing the initial investment by the expected annual cash flows. It represents the length of time required to recoup the initial investment. However, this approach ignores the timing of cash flows beyond the payback period, which can lead to incomplete decision-making.
One of the limitations of the payback period is that it does not consider the time value of money. It treats all cash flows equally, without accounting for the fact that a dollar received in the future is worth less than a dollar received today. By not discounting future cash flows, the payback period fails to provide an accurate measure of profitability or return on investment..
While the payback period may be simple to understand and calculate, it should not be relied upon as the sole basis for making capital budgeting decisions. It is important to consider other financial metrics and perform a comprehensive analysis that incorporates the time value of money and the profitability of an investment.
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the reactions that produce molecular oxygen o2 take place in
The reactions that produce molecular oxygen (O2) primarily take place in photosynthetic organisms, specifically in the chloroplasts of plant cells and some types of bacteria.
In plants, oxygen is produced during the light-dependent reactions of photosynthesis, which occur in the thylakoid membranes of the chloroplasts. These reactions involve the absorption of light energy by chlorophyll and the subsequent conversion of light energy into chemical energy in the form of ATP and NADPH. As a byproduct of these reactions, molecular oxygen is released into the surrounding environment.
In addition to photosynthesis, some bacteria also have the ability to produce molecular oxygen through a process called oxygenic photosynthesis. Cyanobacteria, for example, have specialized structures called thylakoids where photosynthetic reactions occur, similar to plant chloroplasts. Through the process of oxygenic photosynthesis, these bacteria can generate molecular oxygen as a byproduct.
It's important to note that molecular oxygen can also be produced through other non-biological processes, such as the photolysis of water during the photodissociation of atmospheric molecules in the upper atmosphere. However, in the context of biological systems, the primary production of molecular oxygen occurs through photosynthetic reactions in plants and certain bacteria.
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Sales = R14 million
Costs = R4 million
Tax Rate = 0.35
If the company will pay R2.8 million in estimated taxes, what will their depreciation expense be? Show your workings.
The depreciation expense will be R3,846,154. Depreciation is a non-cash expense that lowers the company's tax liability.
As per the information provided, Sales = R14 million and Costs = R4 million.Tax rate = 0.35Estimated Taxes = R2.8 million.
Let's first calculate the
taxable income = R14 million - R4 million
= R10 million.
Taxes payable = Tax rate x Taxable income
= 0.35 x R10 million
= R3.5 million.
Since the estimated taxes payable are R2.8 million, it means that the company has already paid R2.8 million and still needs to pay R0.7 million. Depreciation is a non-cash expense that helps to reduce the tax burden of the company. It is calculated using the following formula:
Depreciation = (Sales - Costs - Taxes) / Depreciation rate
We can rearrange the formula as follows:
Depreciation rate = (Sales - Costs - Taxes) / Depreciation
Let's substitute the values:
Depreciation rate = (R14 million - R4 million - R2.8 million) / Depreciation
Depreciation rate = R7.2 million / Depreciation
Now we can calculate the Depreciation expense:
Depreciation = Depreciation rate x Depreciation expense
Depreciation expense = Depreciation rate / Depreciation expense
Depreciation expense = R7.2 million / R1.875 million.
Depreciation expense = R3,846,154
Therefore, the depreciation expense will be R3,846,154.
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Granfield Company is considering eliminating its backpack division which reported a loss for the recent year of $42,000 as shown below.
Segment Income Loss
Sales - $960,000
Variable Cost- $475,000
Contribution Margin - $485,000
Fixed costs - $527,000
Income (Loss) - $(42,000)
If the backpack division is dropped, all $475,000 of it's variable costs are avoidable, and $210,800 of its fixed costs are avoidable. The impact on Granfields income by eliminating this business segment would be
Given Data: Sales - $960,000, Variable Cost- $475,000, Contribution Margin - $485,000, Fixed costs - $527,000Income (Loss) - $(42,000) If the backpack division is dropped, all $475,000 of it's variable costs are avoidable, and $210,800 of its fixed costs are avoidable. We need to calculate the impact on Granfield's income by eliminating this business segment. The profit or loss of a company is given by the formula: Profit = Sales - Variable Costs - Fixed Costs. Let's find out the profit earned by the backpack division:(i) Sales - Variable Cost= 960,000 - 475,000= $485,000(ii) Fixed Costs = $527,000Profit/Loss (P/L) = Sales - Variable Cost - Fixed Costs = $485,000 - $527,000= - $42,000As it's given that the Income (Loss) is $42,000.
This means that the backpack division is running into a loss. Now, if the backpack division is dropped, all $475,000 of its variable costs are avoidable, and $210,800 of its fixed costs are avoidable. That means the new fixed cost will be: Fixed cost = $527,000 - $210,800= $316,200Now, the profit/loss can be calculated using the new fixed cost: Profit/Loss (P/L) = Sales - Variable Cost - Fixed Costs= $485,000 - $0 - $316,200= $168,800 By eliminating the backpack division, the impact on Granfield's income would be an increase of $210,800 as this was the fixed cost that was eliminated due to eliminating the backpack division.
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Franklin Co. reported the following year-end data: Net income Annual cash dividends of per share Market price per (common) share Earnings per share $229,000 $ 3 $ 150 $ 15 Compute the (a) price-earnings ratio and (b) dividend yield. Complete this question by entering your answers in the tabs below. Price Earnings Ratio Dividend Steld Compute the dividend yield. Choose Numerator: Dividend Yield 1 Choose Denominator: 1 Dividend Yield Dividend yield % < Price Earnings Ratio
The price-earnings ratio of the company is 10, indicating that investors are willing to pay 10 times the earnings per share for the stock. The dividend yield is 2%, reflecting the annual cash dividends per share as a percentage of the market price per share. These ratios provide insights into the valuation and income distribution of Franklin Co.'s common stock.
The price-earnings ratio and dividend yield are two financial ratios used to assess the attractiveness of a company's stock. The price-earnings ratio is calculated by dividing the market price per share by the earnings per share, while the dividend yield is calculated by dividing the annual cash dividends per share by the market price per share and expressing it as a percentage.
(a) To compute the price-earnings ratio, we divide the market price per share by the earnings per share. In this case, the market price per share is $150 and the earnings per share is $15. Therefore, the price-earnings ratio would be:
Price-Earnings Ratio = Market Price per Share / Earnings per Share
Price-Earnings Ratio = $150 / $15
Price-Earnings Ratio = 10
(b) To calculate the dividend yield, we divide the annual cash dividends per share by the market price per share and express it as a percentage. In this case, the annual cash dividends per share are $3 and the market price per share is $150. Therefore, the dividend yield would be:
Dividend Yield = (Annual Cash Dividends per Share / Market Price per Share) * 100
Dividend Yield = ($3 / $150) * 100
Dividend Yield = 2%
In conclusion, the price-earnings ratio of the company is 10, indicating that investors are willing to pay 10 times the earnings per share for the stock. The dividend yield is 2%, reflecting the annual cash dividends per share as a percentage of the market price per share. These ratios provide insights into the valuation and income distribution of Franklin Co.'s common stock.
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11) Depreciation will have what effect on (1) net income and (2) total assets? A) (1) Increase; (2) Increase B) (1) Increase; (2) Decrease C) (1) Decrease; (2) Increase D) (1) Decrease; (2) Decrease
D) (1) Decrease. Depreciation is an accounting method used to allocate the cost of an asset over its useful life. It reduces net income by recognizing the gradual decrease in the value of the asset.
This decrease in net income is due to the expense associated with depreciation. Regarding total assets, depreciation also has a decreasing effect. As the value of the asset decreases over time, it is reflected as a reduction in the asset's book value. This reduction in the book value of the asset leads to a decrease in total assets on the balance sheet. In summary, depreciation decreases net income because it is recognized as an expense, and it also decreases total assets due to the reduction in the book value of the depreciated asset.
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The law of demand asserts that, all else being equal, if the price of a certain product or service ________, the quantity demanded of that product or service will ________.
A - rises; stays the same
B - stays the same; decrease
C- falls; increase
D - falls; decrease
F - None of the options above is correct.
The law of demand asserts that all else being equal, if the price of a certain product or service falls, the quantity demanded of that product or service will increase.
When the price of a product or service decreases, it becomes more affordable for consumers. As a result, they are more willing and able to purchase a larger quantity of the product or service. This inverse relationship between price and quantity demanded is a fundamental concept in economics and is known as the law of demand. It reflects the behavior of consumers who seek to maximize their utility or satisfaction by purchasing more of a good when its price is lower. Therefore, option C - falls; the increase is the correct answer.
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Market risk is measured by the standard deviation of returns on a well-diversified portfolio, one that consists of all stocks traded in the market. Such a portfolio is called the market portfolio.
True or False
This statements is True. Market risk, also known as systematic risk, is measured by standard deviation of returns on a well-diversified portfolio, which represents entire market and is referred to as the market portfolio.
In the context of finance and investing, the market refers to the overall environment where buying and selling of financial instruments, such as stocks, bonds, and commodities, take place. It represents the collective behavior of buyers and sellers, determining the prices and trading volumes of various assets. The market can refer to specific segments, such as the stock market or bond market, or can be used in a broader sense to encompass all financial markets. Market conditions, trends, and sentiment play a crucial role in investment decision-making and portfolio management.
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Given an 8 percent interest rate, compute the present value of
payments made in years 1, 2, 3, and 4 of $900, $800, $700, and
$600.
Present values sequence of years 1, 2, 3, and 4 are approximately $833.33, $686.89, $555.04, and $441.89
Compute the present value of payments by using this formula :
[tex]\displaystyle{\displaylines{PV = Payment / (1 + r)n}}[/tex]
PV is the present value,
Payment is the payment amount,
r is the interest rate,
n is the number of years.
The interest rate = 8% or 0.08,
Following are the payments $900, $800, $700, and $600.
Put the values in the formula and calculate the present value for each payment:
[tex]\displaystyle{\displaylines{PV1 = $900 / (1 + 0.08)1}}[/tex]
[tex]\displaystyle{\displaylines{PV2 = $800 / (1 + 0.08)2}}[/tex]
[tex]\displaystyle{\displaylines{PV3 = $700 / (1 + 0.08)3}}[/tex]
[tex]\displaystyle{\displaylines{PV4 = $600 / (1 + 0.08)4}}[/tex]
Calculating these values:
[tex]\displaystyle{\displaylines{PV1 = $900 / (1 + 0.08)1 = $900 / 1.08 = 833.33}}[/tex]
[tex]\displaystyle{\displaylines{PV2 = $800 / (1 + 0.08)2 = $800 / 1.1664 = 686.89}}[/tex]
[tex]\displaystyle{\displaylines{PV3 = $700 / (1 + 0.08)3 = $700 / 1.2597 = 555.04}}[/tex]
[tex]\displaystyle{\displaylines{PV4 = $600 / (1 + 0.08)4 = $600 / 1.3605 = 441.89}}[/tex]
Thus, the present values are $833.33, $686.89, $555.04, and $441.89.
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