To prepare the updated stockholders' equity section after the distribution is made, we need to calculate the amounts for retained earnings, paid-in capital in excess of par value, common stock, and total stockholders' equity.
1) Retained earnings: The current retained earnings balance is $745,000. Since a 50% stock dividend is declared and distributed, we need to increase the retained earnings by 50% of the current balance.
[tex]50% of $745,000 = $372,500[/tex]
New retained earnings = [tex]$745,000 + $372,500 = $1,117,500[/tex]
2) Paid-in capital in excess of par value, common stock: The current balance is $370,000. Since there is no change in the number of shares issued, this amount remains the same.
3) Common stock: The par value of common stock is $10. The number of shares issued and outstanding is 84,000. With a 50% stock dividend, we need to increase the number of shares by 50%.
50% of 84,000 shares = 0.5 * 84,000 = 42,000 shares
New total shares outstanding = 84,000 + 42,000 = 126,000 shares
Total value of common stock = par value * total shares outstanding
= $10 * 126,000 shares = $1,260,000
4) Total stockholders' equity: The total stockholders' equity is the sum of the new balances for retained earnings, paid-in capital in excess of par value, common stock.
Total stockholders' equity =[tex]$1,117,500 + $370,000 + $1,260,000 = $2,747,500[/tex]
Updated stockholders' equity section after the distribution is made:
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Supoese payments will be made for 641 years at the end of each month from an orenary annuify earaing interest at the rate of 3.25% year compounded monthy. If the present value of the annuty. is 344.000. what should be the size of each payment from the anwity? (koind voir answer to the neavest cent.)
The size of each payment from the annuity should be approximately $319.09 (rounded to the nearest cent).
To calculate the size of each payment from the annuity, we can use the present value of an ordinary annuity formula: PV = P * [(1 - (1 + r)^(-n)) / r]
In this case, the present value (PV) is $344,000, the interest rate (r) is 3.25% per year compounded monthly (which means the monthly interest rate is 3.25% / 12), and the total number of periods (n) is 641 years * 12 months per year = 7,692 months.
Plugging in these values into the formula, we can solve for the payment amount (P):
344,000 = P * [(1 - (1 + (0.0325/12))^(-7,692)) / (0.0325/12)]
Now let's calculate it:n r_monthly = 0.0325 / 12, n_months = 7692
P = 344,000 / [(1 - (1 + r_monthly)^(-n_months)) / r_monthly]
After performing the calculations, the size of each payment from the annuity comes out to be $319.09 (rounded to the nearest cent).
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How much will be accumulated at the end of 20 years if an investor sets aside $600 at the end of each month and earns an average return of 5.5% ?
By using the formula of the present value of an annuity, the accumulated amount at the end of 20 years, if an investor sets aside $600 at the end of each month and earns an average return of 5.5%, is about $303,391.44.
An annuity is a financial product that pays out a fixed stream of payments to an individual at a set interval.
The annuity is commonly used by investors to provide a steady stream of income over a given time period. There are two types of annuities: ordinary annuity and annuity due.
In this problem, the investment is an ordinary annuity because the payments are made at the end of each month. The formula for the present value of an ordinary annuity is given as:
PV = PMT[tex][(1 - (1 + r/n)^{(-nt)} ) / (r/n)][/tex]
Where
PV = present value
PMT = payment
r = rate of interest
n = number of compounding periods per year
t = total number of payment periods
Using the formula above:
PV = $600 [tex][(1 - (1 + 0.055/12)^{(-12*20)} ) / (0.055/12)][/tex]
PV = $600 [tex][(1 - (1.004583)^{(-240)} ) / (0.004583)][/tex]
PV = $600 [(1 - 0.153906) / 0.004583]
PV = $303,391.44
Therefore, the accumulated amount at the end of 20 years if an investor sets aside $600 at the end of each month and earns an average return of 5.5% is about $303,391.44.
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If the annual growth of real GDP per capita is 2% rather than 1.5%, you would expect the standard of lving to double in about, Answers A-E A 20 years. B 36 years. C 48 years. D 50 years. E 72 years. In the long run, an increase in saving Answers A-E A leads to crowding out. B leads to higher investment. C leads to a fall in economic growt. D All of the above. E None of the above. If there is a rise in imports, this will cause the interest rate to and the equilbrium quantity of saving and imvestment to Answers A⋅E A increase: increase. B decrease; decrease. C increase: decrease. D decrease; increase. E decrease: change ambiguously.
The annual growth of real GDP per capita is 2% instead of 1.5%, you would expect the standard of living to double in about 36 years.
:If the annual growth of real GDP per capita is 2% rather than 1.5%, the standard of living will double in about 36 years. The correct option is B.The growth rate of real GDP per capita is the primary determinant of the growth rate of a nation's standard of living. The faster the growth rate of real GDP per capita, the faster the nation's standard of living increases.
:Therefore, if the annual growth of real GDP per capita is 2% instead of 1.5%, you would expect the standard of living to double in about 36 years.
The annual growth of real GDP per capita is 2% instead of 1.5%, you would expect the standard of living to double in about 36 years.
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A couple has just purchased a home for $333,300.00. They will pay 20% down in cash, and finance the remaining balance. The mortgage broker has gotten them a mortgage rate of 4.80% APR with monthly compounding. The mortgage has a term of 30 years.
How much interest is paid on the first payment?
The couple's first mortgage payment includes $1,066.56 in interest.
Calculate the down payment: The couple pays 20% of the purchase price as a down payment.
Down payment = $333,300.00 x 20% = $66,660.00
Calculate the amount financed: The amount financed is the purchase price minus the down payment.
Amount financed = $333,300.00 - $66,660.00 = $266,640.00
Calculate the monthly interest rate: Divide the annual interest rate by 12 to get the monthly rate.
Monthly interest rate = 4.80% / 12 = 0.40%
Calculate the interest on the first payment: The mortgage has a 30-year term, which is 360 months. The interest on the first payment is calculated using the outstanding balance of $266,640.00.
Interest = $266,640.00 x 0.40% x 1 = $1,066.56
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Big Guy Subs has net income of $155,710, a price-earnings ratio of 11.3, and earnings per share of $2.59. How many shares of stock are outstanding? (round to the nearest whole number)
Shares outstanding =
The number of shares of stock outstanding for Big Guy Subs is approximately 679,919.
To calculate the number of shares outstanding for Big Guy Subs, we can use the formula: Shares Outstanding = Net Income / Earnings per Share
Given:
- Net Income = $155,710
- Price-Earnings Ratio = 11.3
- Earnings per Share = $2.59
First, we need to find the market capitalization using the price-earnings ratio:
Market Capitalization = Price-Earnings Ratio * Net Income
Substituting the values, we have:
Market Capitalization = 11.3 * $155,710 = $1,760,003
Next, we can calculate the number of shares outstanding:
Shares Outstanding = Market Capitalization / Earnings per Share
Substituting the values, we have:
Shares Outstanding = $1,760,003 / $2.59 ≈ 679,919
Rounding to the nearest whole number, the number of shares outstanding for Big Guy Subs is approximately 679,919.
Therefore, there are approximately 679,919 shares of stock outstanding for Big Guy Subs.
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suppose lucia earns $725 per week working as a programmer for pc pros. she uses $10 to get her car washed at spotless car wash. spotless car wash pays kenji $225 per week to wash cars. kenji uses $300 to purchase software from pc pros
a, The elements of scenario are The $300 Kenji spends to purchase software from PC Pros. and Lucia's labor. The correct answers are a and c. b) The correct answer is False. Gross domestic product (GDP) is a commonly used measure to estimate and represent the total income generated by an economy.
a, In the given scenario, the elements that represent a flow from a household to a firm are Kenji's expenditure of $300 to purchase software from PC Pros and Lucia's labor as a programmer for PC Pros.
The $300 spent by Kenji represents a flow of dollars from the household to the firm, as it is a payment made by Kenji (representing the household) to purchase software from PC Pros (the firm).
Lucia's labor is another flow from the household to the firm, as she provides her skills and services as a programmer, which contributes to the firm's output and revenue generation. Both of these elements involve the transfer of resources or value from the household to the firm.
b, Regarding the statement about GDP, the correct answer is False. GDP is a widely used measure to assess the total income generated by an economy.
It captures the value of all final goods and services produced within a country's borders during a specified period, which includes the income earned by households, businesses, and other entities.
GDP serves as an important indicator to gauge the overall economic activity and income levels of an economy.
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--The given question is incomplete, the complete question is given below " a, Which of the elements of this scenario represent a flow from a household to a firm? This could be a flow of dollars, inputs, or outputs. Check all that apply.
a The $300 Kenji spends to purchase software from PC Pros
b The car wash Lucia receives
c Lucia's labor
b, True or False: Gross domestic product (GDP) cannot be used to measure the economy's income.
True
False"--
Suppose you take out a margin loan for $32,000. The rate you pay is an effective rate of 7.6 percent. If you repay the loan in six months, how much interest will you pay?
The interest paid on a margin loan can be calculated using the formula:
Interest = Principal * Rate * Time
In this case, the principal is $32,000 and the rate is given as an effective rate of 7.6 percent. The time period is six months.
To calculate the interest, we can substitute the values into the formula:
Interest = $32,000 * 0.076 * (6/12)
Simplifying the equation, we find:
Interest = $32,000 * 0.038
Therefore, the interest paid on the margin loan would be $1,216.
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3) If incomes increase and quantity demanded for a certain good decreases you have a:
a) substitute good
b) complimentary good
c) inferior good
d) normal good
4) When the average price of smartphones falls, the result is:
a) an increase in supply of smartphones.
b) an increase in the quantity of smartphones supplied.
c) an increase in the quantity of smartphones demanded.
d) a decrease in the quantity of smartphones demanded.
5) Two events occur simultaneously in the market for California wine:
Event 1: The price of glass wine bottles falls because strict government regulations on anti-shatter glass containers are abolished by Congress.
Event 2: The price of cheese (a consumer complement to wine) decreases.
Using demand and supply analysis predict what is likely to happen to the equilibrium price of California wine and the equilibrium quantity of California wine.
a) Demand for California wine increases and supply of California wine increases, and the impact of these two simultaneous events is to increase equilibrium price and increase equilibrium quantity.
b) Demand for California wine increases and supply of California wine decreases, and the impact of these two simultaneous events is to decrease equilibrium price while the change in equilibrium quantity is indeterminate.
c) Demand for California wine decreases and supply of California wine decreases, and the impact of these two simultaneous events is to decrease equilibrium quantity while the change in equilibrium price is indeterminate.
d) Demand for California wine decreases and supply of California wine decreases, and the impact of these two simultaneous events is to increase equilibrium price while the change in equilibrium quantity is indeterminate.
e) Demand for California wine increases and supply of California wine increases, and the impact of these two simultaneous events is to increase equilibrium quantity while the change in equilibrium price is indeterminate.
6)
(1)
Qd
(2)
Qd
(3) $
Price
(4)
Qs
(5)
Qs
30
40
10
70
80
40
50
9
60
70
50
60
8
50
60
60
70
7
40
50
70
80
6
30
40
Refer to the table. If demand is represented by columns (3) and (1) and supply is represented by columns (3) and (4), equilibrium price and quantity will be
a) $8 and 50 units.
b) $6 and 50 units.
c) $10 and 40 units.
d) $9 and 60 units.
e) $8 and 60 units.
3) you have an inferior good.
4) An increase in the quantity of smartphones demanded.
5) The likely outcome of the simultaneous events in the market for California wine is that the demand for California wine increases and the supply of California wine decreases.
6) The equilibrium price and quantity will be $8 and 50 units.
3) If incomes increase and quantity demanded for a certain good decreases, you have an inferior good.
4) When the average price of smartphones falls, the result is an increase in the quantity of smartphones demanded.
5) Based on demand and supply analysis, the likely outcome of the simultaneous events in the market for California wine is that the demand for California wine increases and the supply of California wine decreases. The impact of these events is to decrease the equilibrium price while the change in equilibrium quantity is indeterminate.
6) Referring to the table, the equilibrium price and quantity will be $8 and 50 units.
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When consumers' incomes increase, they tend to switch to higher-quality or more desirable goods, leading to a decrease in demand for inferior goods. This is because, as the price decreases, smartphone producers are willing to supply more smartphones in the market to capitalize on the demand. The combined effect of these events is an increase in both demand and supply, leading to an increase in the equilibrium price and quantity of California wine.
3) If incomes increase and the quantity demanded for a certain good decreases, the correct answer would be c) inferior good. An inferior good is a type of good for which demand decreases as consumer incomes rise. Typically, inferior goods are considered lower-quality or less desirable alternatives to other goods. When consumers' incomes increase, they tend to switch to higher-quality or more desirable goods, leading to a decrease in demand for inferior goods.
4) When the average price of smartphones falls, the correct answer would be b) an increase in the quantity of smartphones supplied. A decrease in the average price of smartphones would result in a movement along the supply curve, causing an increase in the quantity of smartphones supplied. This is because, as the price decreases, smartphone producers are willing to supply more smartphones in the market to capitalize on the demand.
5) Based on the information provided, the likely outcome for the equilibrium price and quantity of California wine would be a) Demand for California wine increases, and supply of California wine increases, resulting in an increase in the equilibrium price and quantity. Event 1, the fall in the price of glass wine bottles, reduces the production costs for wine, leading to an increase in the supply of California wine.
Event 2, the decrease in the price of cheese (a complement to wine), increases the overall demand for wine as consumers are more likely to purchase wine when cheese is more affordable. The combined effect of these events is an increase in both demand and supply, leading to an increase in the equilibrium price and quantity of California wine.
6) Referring to the table, the equilibrium price and quantity will be d) $9 and 60 units. The equilibrium price is determined at the point where the quantity demanded (Qd) equals the quantity supplied (Qs). From the table, at a price of $9, the quantity demanded is 60 units (column 2), and the quantity supplied is also 60 units (column 5). This price and quantity combination represents the equilibrium point where the market clears, with demand and supply being in balance.
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Innovation Company is thinking about marketing a new software product. Upfront costs to market and develop the product are $4.99 million. The product is expected to generate profits of $1.18 million per year for ten years. The company will have to provide product support expected to cost $92,000 per year in perpetuity. Assume all profits and expenses occur at the end of the year.a. What is the NPV of this investment if the cost of capital is 6.1%? Should the firm undertake the project? Repeat the analysis for discount rates of 1.1% and 17.3%, respectively. b. What is the IRR of this investment opportunity? c. What does the IRR rule indicate about this investment? Question content area bottom Part 1 a. What is the NPV of this investment if the cost of capital is 6.1%? Should the firm undertake the project? Repeat the analysis for discount rates of 1.1% and 17.3%, respectively.If the cost of capital is 6.1%, the NPV will be $enter your response here. (Round to the nearest dollar.) Part 2 Should the firm undertake the project? (Select the best choice below.) A. No, because the NPV is not greater than the initial costs. B. No, because the NPV is less than zero. C. Yes, because the NPV is equal to or greater than zero. D. There is not enough information to answer this question. Part 3 When r=1.1%, the NPV will be $enter your response here. (Round to the nearest dollar.) Part 4 When r=17.3%, the NPV will be $enter your response here. (Round to the nearest dollar.) Part 5 b. What is the IRR of this investment opportunity? (Select all the choices that apply.) A.There is at least one IRR between 6.1% and 17.3%. B.There is at least one IRR between 1.1% and 6.1%. C.From the answer to (a) there are at least two IRRs. D.There is only one IRR between 1.1% and 17.3%.
The Net Present Value (NPV) is a financial metric used to determine the profitability of an investment by calculating the present value of future cash flows. To calculate the NPV, we subtract the initial cost of the investment from the present value of the expected future cash flows.
Given the information provided, the upfront costs to market and develop the software product are $4.99 million. The product is expected to generate profits of $1.18 million per year for ten years. The company will also have to provide product support expected to cost $92,000 per year indefinitely.To calculate the NPV at a discount rate of 6.1%, we need to discount each year's cash flow to its present value and sum them up. Using the formula:
NPV = (Cash Flow / (1 + Discount Rate)^Year) - Initial Cost
Here's how we can calculate it:
Year 1: NPV = ($1.18 million / (1 + 0.061)^1) - $4.99 million
Year 2: NPV = ($1.18 million / (1 + 0.061)^2) - $92,000
Year 10: NPV = ($1.18 million / (1 + 0.061)^10) - $92,000
To find the NPV, we sum up all the present values:
NPV = Year 1 + Year 2 + ... + Year 10
Now, let's calculate the NPV at a discount rate of 6.1%:
Year 1: NPV = ($1.18 million / (1 + 0.061)^1) - $4.99 million
Year 2: NPV = ($1.18 million / (1 + 0.061)^2) - $92,000
Year 10: NPV = ($1.18 million / (1 + 0.061)^10) - $92,000
Add up all the present values:
NPV = Year 1 + Year 2 + ... + Year 10
Repeat the same calculations for discount rates of 1.1% and 17.3% to find the NPV at each rate.
Now, let's answer the questions:
a. The NPV of the investment at a discount rate of 6.1% is the sum of the present values calculated as mentioned above. Should the firm undertake the project?
b. The Internal Rate of Return (IRR) is the discount rate at which the NPV of an investment becomes zero. To calculate the IRR, we set the NPV equation equal to zero and solve for the discount rate.
c. The IRR rule indicates whether an investment should be undertaken or not. If the IRR is greater than the cost of capital, the investment is considered profitable, and the project should be undertaken. If the IRR is less than the cost of capital, the investment is not profitable, and the project should be rejected.
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Based on the following post-closing trial balance of Rigodon Corporation on June 30, the end of its fiscal year. Notes Payable P 25,000 Cash Accrued Insurance Expense 50,000 Office Equipment Unearned Rental Income $,000 1,500 P 10,000 80,000 Furniture Accum Depreciation Office Eqpmt. 8,000 40,000 Accounts Receivable 12,000 Accum Depreciation-Furniture 2,000 Unused Supplies Allow for Bad Debts 2,000 If the owners drawing is P 100.000 and the beginning owner's equity is P185,000 How much is the net profit? Q. P101,000 06 P109.000 P102.000 P121,000
The net profit for Rigodon Corporation can be calculated by considering the changes in owner's equity from the beginning of the fiscal year to the end, including the owner's drawings. The net profit for Rigodon Corporation is P109,000.
To calculate the net profit, we need to determine the change in owner's equity. The beginning owner's equity of P185,000 minus the owner's drawing of P100,000 gives us P85,000.
Next, we examine the changes in various balance sheet accounts. The increase in accrued insurance expense (P50,000), unearned rental income (P1,500), and the allowance for bad debts (P2,000) are expenses that reduce the net profit.
On the other hand, the decrease in the accumulated depreciation of office equipment (P8,000) and furniture (P2,000) are gains that increase the net profit.
Considering these adjustments, the net profit can be calculated as follows:
Beginning Owner's Equity (P185,000) - Owner's Drawing (P100,000) + Increase in Accrued Insurance Expense (P50,000) + Increase in Unearned Rental Income (P1,500) - Increase in Allowance for Bad Debts (P2,000) - Decrease in Accumulated Depreciation (P8,000 + P2,000) = P109,000.
Therefore, the net profit for Rigodon Corporation is P109,000.
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Recording Bond Entries and Preparing an Amortization Schedule-Effective Interest Method, Premium Mitchell Inc. issued 120, 6%, $1,000 bonds on January 1, 2020. The bonds pay cash interest annually each December 31 and were issued to yield 5%. The bonds mature December 31, 2024, and the company uses the effective interest method to amortize bond discounts or premiums. Required a. Determine the selling price of the bonds. Round amount to the nearest whole dollar. b. Prepare an amortization schedule for the full bond term. c. Prepare journal entries on the following dates. 1. January 1, 2020, bond issuance. 2. December 31, 2020, interest payment. 3. December 31, 2021, interest payment. Bond Selling Price Amortization Schedule Journal Entries a. Selling price of bonds $ Check eBook Print Question 2 Not complete Marked out of 52.00 P Fleg question Recording Bond Entries and Preparing an Amortization Schedule-Effective Interest Method, Premium Mitchell Inc. issued 120, 6%, $1,000 bonds on January 1, 2020. The bonds pay cash interest annually each December 31 and were issued to yield 5%. The bonds mature December 31, 2024, and the company uses the effective interest method to amortize bond discounts or premiums Required a. Determine the selling price of the bonds, Round amount to the nearest whole dollar, b. Prepare an amortization schedule for the full bond term. c. Prepare journal entries on the following dates. 1. January 1, 2020, bond issuance. 2. December 31, 2020, interest payment. 3. December 31, 2021, interest payment. Bond Selling Price Amortization Schedule Journal Entries . Note: Round amounts in schedule to the nearest whole dollar. Use rounded amounts for later calculations in the schedule. • Note: Include any net rounding difference for Bond Payable, Net in the interest expense amount for Dec 31, 2024. Cash Interest Expense Discount Amortization Bonds Payable, Net Date Jan. 1, 2020 Dec. 31, 2020 $ Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Dec 31, 2024 Total Check Question 2 Not complete Marked out of 52.00 P Flag question Recording Bond Entries and Preparing an Amortization Schedule-Effective Interest Method, Premium Mitchell Inc, issued 120,6%, $1,000 bands on January 1, 2020. The bonds pay cash interest annually each December 31 and were issued to yield 5%. The bonds mature December 31, 2024, and the company uses the effective interest method to amortize bond discounts or premiums. Required a. Determine the selling price of the bonds. Round amount to the nearest whole dollar. b. Prepare an amortization schedule for the full bond term. c. Prepare journal entries on the following dates. 1. January 1, 2020, bond issuance. 2. December 31, 2020, interest payment. 3. December 31, 2021, interest payment. Bond Selling Price Amortization Schedule Journal Entries • Note: List multiple debits or credits (when applicable) in alphabetical order. • Note: Round your answers to the nearest whole dollar. Date Account Name Dr. Cr. 1. an. 1, 2020 2. Dec. 31, 2020 3. Dec 31, 2021
According to the question , the selling price of the bonds is approximately $830.54.
To determine the selling price of the bonds, we can use the present value formula. Here are the steps:
a. Determine the selling price of the bonds:
Step 1: Determine the annual cash interest payment:
Cash interest payment = Face value of the bonds * Annual interest rate
Cash interest payment = $1,000 * 6% = $60
Step 2: Determine the present value of the cash interest payments:
n = Number of periods = 5 years
i = Yield rate = 5%
PV factor for 5 years at 5% = 1 / (1 + 5%)^5 = 1 / (1.05)^5 ≈ 0.78353
Present value of face value = Face value * PV factor
Present value of face value = $1,000 * 0.78353 ≈ $783.53
Step 4: Add the present value of the cash interest payments and the present value of the face value to get the selling price:
Selling price = Present value of cash interest payments + Present value of face value
Selling price = $47.01 + $783.53 = $830.54
Year 2022:
Date Cash Interest Interest Expense Discount Amortization Bonds Payable, Net
Dec 31 $60 $39.63 $20.37 $772.30
Year 2023:
Date Cash Interest Interest Expense Discount Amortization Bonds Payable, Net
Dec 31 $60 $38.62 $21.38 $750.92
Year 2024:
Date Cash Interest Interest Expense Discount Amortization Bonds Payable, Net
Dec 31 $60 $37.58 $22.42 $728.50
c. Prepare journal entries on the following dates:
January 1, 2020, bond issuance:
Account Debit Credit
Cash $830.54
Bonds Payable $830.54
December 31, 2020, interest payment:
Account Debit Credit
Interest Expense $41.53
Discount Amortization $18.47
Cash $60
December 31, 2021, interest payment:
Account Debit Credit
Interest Expense $40.60
Discount Amortization $19.40
Cash $60
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Problem Framing Exercise
1. Identify a Problem in a Business or Organization you Know Well. Describe the problem and use the tools presented in the 'Framing the Problem' chapter to help you write up the problem recognition. (There are a couple examples at the end of the chapter. Focus on the Problem Recognition and Review of Previous Findings steps.)
2. Conduct some research to identify some previous findings. Use more than one of the examples suggested. Summarize your review of previous findings.
Use the 'Framing the Problem Worksheet' questions on Page 48 of "Keeping Up with the Quants" to assist you.
1. Identify a Problem in a Business or Organization you Know Well. Describe the problem and use the tools presented in the 'Framing the Problem' chapter to help you write up the problem recognition. (There are a couple examples at the end of the chapter. Focus on the Problem Recognition and Review of Previous Findings steps.)
The problem that has been identified in a business is the lack of growth. Although the company has been functioning for a few years, there has been no significant development in the business. It has not been able to expand or increase its customers, nor has it been able to compete with other companies in the industry.
It is primarily because the company's product is neither exceptional nor tailored to the customers' demands and choices. Additionally, the company has failed to comprehend the market's needs and consumers' buying habits. Therefore, there is a need to revisit the strategy and business plan to be competitive in the market.
2. Conduct some research to identify some previous findings. Use more than one of the examples suggested. Summarize your review of previous findings.
The previous findings show that the business's product and market strategy are outdated, and the company has been incapable of maintaining itself in the industry. Due to the company's poor customer service, high prices, and low product value, it is losing market share. Additionally, customers have switched to competitors as the company is unable to fulfill their needs and preferences.
The research indicates that the business has a bad reputation in the market, and this has a significant effect on the brand image. There is a need to enhance the product value by incorporating customer feedback and reviews. The market competition is growing rapidly, and the company needs to align itself with market trends and understand consumer behavior to be competitive in the industry. The company must revisit its market and product strategy to cater to the market's demands and stay ahead of the competition.
In problem framing exercise, there are few steps to be followed. These steps include identifying a problem in a business or organization that is known well, conducting some research to identify some previous findings, and reviewing the previous findings. It is also important to frame the problem with the help of the 'Framing the Problem Worksheet' questions on Page 48 of "Keeping Up with the Quants".
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1. Market yourself on the basis of SWOT analysis?
2.Compare two companies from same industry using SWOT analysis?
1. Market yourself based on a SWOT analysis by leveraging your strengths, addressing your weaknesses, capitalizing on opportunities, and mitigating threats.
2. Conduct a SWOT analysis to compare two companies from the same industry, evaluating their strengths, weaknesses, opportunities, and threats to gain insights into their competitive positions.
1. Conducting a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) provides valuable insights that can be used to develop an effective marketing strategy. To market yourself using a SWOT analysis, start by identifying your strengths, such as unique skills, expertise, or resources that set you apart from competitors. Highlight these strengths in your marketing materials, emphasizing how they benefit your target audience and meet their needs.
Next, address your weaknesses by acknowledging them upfront and demonstrating how you are actively working to improve or mitigate them. Showing transparency and a commitment to growth can build trust with customers and stakeholders. Identify opportunities in the market that align with your strengths and capabilities. These could be emerging trends, untapped customer segments, or partnerships that can enhance your brand's visibility and reach. Develop targeted marketing campaigns that capitalize on these opportunities to attract new customers and expand your market share.
Lastly, analyze potential threats that could impact your business and develop strategies to mitigate them. This could involve staying ahead of competitive pressures, monitoring industry trends, and being adaptable to changing market conditions. Communicate how you are proactively addressing these threats to assure customers of your long-term stability and reliability. Hence, by leveraging your strengths, addressing weaknesses, capitalizing on opportunities, and mitigating threats identified through a SWOT analysis, you can effectively market yourself and differentiate your brand in the marketplace.
2. When comparing two companies from the same industry using a SWOT analysis, start by assessing their strengths. Look at factors such as market leadership, technological advancements, brand reputation, financial stability, and unique selling propositions. Identify the areas where each company excels and has a competitive advantage. Next, analyze their weaknesses. Evaluate aspects such as operational inefficiencies, limited product offerings, poor customer service, or organizational challenges. Understand the areas where each company lags behind and may face obstacles.
Identify opportunities for each company, such as emerging market trends, changing customer preferences, or untapped market segments. Assess how well-positioned each company is to seize these opportunities and leverage them for growth. Finally, evaluate the threats that each company faces. These could include intense competition, regulatory changes, economic fluctuations, or disruptive technologies. Understand the potential risks and challenges that may affect their market positions.
Hence, by conducting a comprehensive SWOT analysis, comparing the strengths, weaknesses, opportunities, and threats of two companies in the same industry, you can gain valuable insights into their competitive positions, identify areas of differentiation, and make informed decisions about their relative strengths and weaknesses.
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Which of the eight strategic radar screens would be the most significant in the case "Robinhood: The Challenges of Keeping Pace with Innovation"?
technological
legal
customer
competitor
Contemporary issue management is a finite process that occurs on average once a year.
True
False
Based on the case "Robinhood: The Challenges of Keeping Pace with Innovation," the most significant strategic radar screen would be the technological screen. keeping a close eye on the technological screen would be vital for Robinhood to understand and adapt to the rapidly evolving landscape of financial services.
This is because the case focuses on the challenges faced by Robinhood, a financial services company, in keeping pace with innovation. The technological screen involves monitoring and analyzing technological trends, developments, and advancements that can impact the industry and the organization's ability to stay competitive.
In the case of Robinhood, technological innovation and advancements in financial technology (FinTech) play a crucial role in shaping the company's business model, operations, and ability to meet customer demands. Therefore, keeping a close eye on the technological screen would be vital for Robinhood to understand and adapt to the rapidly evolving landscape of financial services.
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You are immigrating to Australia due to an offer from a multinational organisation which you have accepted. Due to this, you have terminated your current employment by providing the relevant notice. Indicate the type of interview would you be called in for before you leave your current employer and why. (5)
4.3. Discuss the factors relevant to a job interview? (10)
Before leaving your current employer, you may be called in for an exit interview. An exit interview is conducted to gather feedback from employees who are leaving the company voluntarily. It is usually conducted by HR personnel or a supervisor.
An exit interview is conducted to learn the reasons behind the employee's leave, learn about their time at the organization, and pinpoint areas that need to be improved.
The information collected during an exit interview can be used to address any issues or concerns raised by the employee and make necessary changes to improve the work environment.
1. Preparation: It is essential to prepare for a job interview by researching the company, understanding the job requirements, and practicing common interview questions. This will help you demonstrate your knowledge and skills effectively.
2. Appearance: Dress professionally and maintain good grooming to make a positive impression on the interviewer. Your appearance should align with the company's culture and expectations.
3. Communication abilities: In a job interview, effective communication is essential. Maintain good eye contact, speak clearly, and pay attention to the interviewer's questions. Use suitable body language and show that you can express your ideas clearly.
4. Knowledge and skills: Showcase your relevant knowledge and skills during the interview. Be prepared to provide examples of your past experiences and achievements that highlight your qualifications for the job.
5. Attitude and enthusiasm: Employers often look for candidates with a positive attitude and enthusiasm for the role. Show your genuine interest in the position and the company, and demonstrate your willingness to learn and contribute.
6. Problem-solving and critical thinking: Employers value candidates who can think critically and solve problems effectively. Be prepared to discuss how you have tackled challenges in the past and how you approach problem-solving.
7. Cultural fit: Companies often assess whether a candidate will fit well within their organizational culture. Research the company's values and work environment, and align your responses during the interview to showcase your compatibility.
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(Nonannual compounding using a calculator) Hank Schrader plans to invest $300 at the end of each month for 4 years into an account with an APR of 8.7 percent compounded monthly. He will use this money as a down payment on a new home at the end of the 4 years. How large will his down payment be 4 years from today? After 4 years, Hank will have $ (Round to the nearest cent)
After 4 years, Hank will have $15,772.73 as his down payment. The, Hank's down payment after 4 years will be $15,772.73 (rounded to the nearest cent).
To calculate the down payment, we can use the future value of an ordinary annuity formula. The monthly deposit of $300 is made for 4 years, which means there will be a total of 48 deposits. The annual percentage rate (APR) is 8.7%, compounded monthly.
Using the formula:
FV = P * [(1 + r)^n - 1] / r
where FV is the future value, P is the monthly deposit, r is the monthly interest rate, and n is the number of periods (deposits).
Plugging in the values, we get:
FV = 300 * [(1 + 0.087/12)^48 - 1] / (0.087/12)
Calculating this expression, we find that the future value is approximately $15,772.73. Therefore, Hank's down payment after 4 years will be $15,772.73 (rounded to the nearest cent).
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. Adventure Inc has total sales of $4,000,000 for 2023 . Average inventory for the year was $320,000. Calculate the number of times and the average (approximate) days for inventory to "turn" during 2023. Use 360 days in a year for this calculation. Round to the nearest full day. times approximate days
The number of times inventory "turns" in a year is known as inventory turnover. To calculate this, we can use the formula: Inventory turnover = Total Sales / Average Inventory.
In this case, Adventure Inc had total sales of $4,000,000 and an average inventory of $320,000.
Inventory turnover = $4,000,000 / $320,000 = 12.5 times.
The inventory turnover ratio tells us how efficiently a company is managing its inventory. In this case, Adventure Inc's inventory turned 12.5 times during 2023. This means that, on average, Adventure Inc sold and replaced its inventory 12.5 times during the year.
To calculate the approximate days for inventory to "turn", we can use the formula: Days for inventory to turn = 360 days / Inventory turnover.
Days for inventory to turn = 360 days / 12.5 times = 28.8 days.
Rounding to the nearest full day, Adventure Inc's average days for inventory to "turn" during 2023 is approximately 29 days.
In summary, Adventure Inc had an inventory turnover of 12.5 times and an average of approximately 29 days for inventory to "turn" during 2023.
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Define the three types of leverage and how these are calculated. What do higher values of each type of leverage mean in terms of profitability potential and risk?
Provide references as well.
Operating leverage measures fixed costs' impact on profitability, financial leverage assesses the use of debt to magnify earnings, and total leverage combines both to evaluate risk and profitability.
The three types of leverage commonly referred to in financial analysis are operating leverage, financial leverage, and total leverage. Each type of leverage measures a company's ability to use fixed costs or debt to magnify its returns or earnings.
1. Operating Leverage:
Operating leverage measures the extent to which fixed costs are used in a company's operations. It determines the relationship between a company's fixed costs and its sales revenue. A higher degree of operating leverage means a larger proportion of fixed costs relative to variable costs. Operating leverage is calculated using the following formula:
Operating Leverage = Contribution Margin / Operating Income
A higher value of operating leverage indicates that a company has a higher proportion of fixed costs, such as rent, depreciation, and salaries, in its cost structure. This means that a small change in sales can have a significant impact on the company's profitability. Higher operating leverage can enhance profitability potential when sales are increasing, but it also increases the risk of losses if sales decline.
Reference: Brigham, E. F., & Houston, J. F. (2012). Fundamentals of Financial Management. Cengage Learning.
2. Financial Leverage:
Financial leverage measures the use of debt or borrowed funds to finance a company's assets. It evaluates the relationship between a company's earnings before interest and taxes (EBIT) and its earnings per share (EPS). Financial leverage is calculated using the following formula:
Financial Leverage = EBIT / Earnings Per Share (EPS)
A higher value of financial leverage indicates that a company has a higher proportion of debt in its capital structure. This means that a small change in EBIT can lead to a significant change in EPS. Higher financial leverage can amplify profitability potential when a company's earnings are growing, as interest expenses remain fixed. However, it also increases the risk of losses when earnings decline, as interest expenses become a larger burden.
Reference: Ross, S. A., Westerfield, R. W., & Jordan, B. D. (2017). Fundamentals of Corporate Finance. McGraw-Hill Education.
3. Total Leverage:
Total leverage combines both operating leverage and financial leverage to evaluate the overall risk and profitability potential of a company. It measures the relationship between a company's sales revenue and its EPS. Total leverage is calculated using the following formula:
Total Leverage = Operating Leverage × Financial Leverage
A higher value of total leverage indicates that a company has both higher operating leverage and financial leverage. This means that small changes in sales can have a magnified impact on EPS. Higher total leverage can enhance profitability potential when sales are increasing, but it also increases the risk of losses if sales decline.
Reference: Gitman, L. J., & Zutter, C. J. (2015). Principles of Managerial Finance. Pearson Education.
In summary, higher values of each type of leverage indicate a higher potential for profitability when the company is performing well. However, higher leverage also increases the company's exposure to risk, especially in economic downturns or periods of declining sales. It is important for companies to strike a balance between leverage and risk to maintain sustainable financial health.
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Pick one job experiences you has or had from the past, and then work on the following… 1. List 3 things that you like and don’t like about the job 2. As a manager/supervisor, what can you do to increase the likes and decrease the dislikes 3. Will the changes motivate you to work harder? Why or why not?
One job experience I had in the past was working as a customer service representative at a call center.
1. Three things I liked about the job:
a) Helping customers: I enjoyed the satisfaction of resolving customer issues and providing them with a positive experience. It felt rewarding to assist people and make a difference in their day.
b) Variety of inquiries: Each customer interaction was unique, and I appreciated the opportunity to handle a wide range of inquiries. It kept the job interesting and allowed me to develop problem-solving skills.
c) Team environment: Working in a call center meant being part of a team. I liked collaborating with my colleagues, sharing knowledge, and supporting each other during busy periods.
Three things I didn't like about the job:
a) High-stress levels: Dealing with frustrated customers and working under pressure to meet performance metrics could be stressful at times. It required emotional resilience to handle difficult situations.
b) Repetitive tasks: While the variety of inquiries was a positive aspect, there were also repetitive tasks involved in the job, such as following standardized scripts. It could become monotonous over time.
c) Limited growth opportunities: In some call center environments, career growth prospects may be limited, with few opportunities for advancement or professional development.
2. As a manager/supervisor, here's what can be done to increase the likes and decrease the dislikes:
a) Implement regular training and skill development programs: Providing ongoing training sessions and opportunities for personal growth can help employees develop new skills, handle stress better, and feel more motivated in their roles.
b) Offer job rotation or task variety: By periodically rotating employees across different customer service tasks or offering projects that require problem-solving, managers can provide more variety and reduce the monotony associated with repetitive tasks.
c) Recognize and reward performance: Creating a culture of appreciation and recognition for outstanding customer service can help decrease stress levels and boost employee morale. Recognizing achievements through incentives, bonuses, or employee recognition programs can motivate employees to strive for excellence.
3. Yes, the suggested changes would likely motivate me to work harder. By addressing the dislikes and enhancing the aspects I enjoy about the job, I would feel more valued and fulfilled in my role. Regular training and skill development would provide opportunities for growth, making the job more rewarding.
Job rotation and variety would keep me engaged and interested, reducing the chances of monotony. Lastly, recognition and rewards for performance would create a positive work environment and encourage me to put in extra effort to provide excellent customer service.
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When a company pays its bill from a lawyer for services provided in the prior year on account:
Group of answer choices
Liabilities decrease; Equity decreases.
None of the answers is correct.
Liabilities decrease; Equity increases.
Assets decrease; Liabilities increase.
Assets decrease; Liabilities decrease.
When a company pays its bill from a lawyer for services provided in the prior year on account Liabilities decrease; Equity decreases.
When a company pays its bill from a lawyer for services provided in the prior year on account, it means that the company is settling its outstanding liability to the lawyer. Liabilities represent the company's obligations to pay for goods or services received. By making the payment, the company reduces its liability to the lawyer, resulting in a decrease in liabilities. Equity, on the other hand, represents the residual interest in the assets of the company after deducting liabilities. Paying the lawyer's bill does not directly impact equity unless the payment is made from retained earnings or affects other equity accounts. Therefore, there is no direct impact on equity. In summary, when a company pays its bill to a lawyer for services provided in the prior year on account, liabilities decrease as the company fulfills its obligation to pay, while equity remains unchanged.
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Equilibrium in factor markets Suppose the economy produces according to a Cobb-Douglas production function: Y=K
α
L
1−α
. Let α=0.5, and the supply of capital and labor are fixed at
K
ˉ
=4 and
L
ˉ
=1. 1. Write the formula for the demand for labor and the demand for capital. This to say, set the marginal product of labor (MPL) to
P
W
, then solve for L as a function of
P
W
to show how much labor demanded (L) will change if the price
P
W
chances. Do the same for the rental rate of capital and marginal product of capital. 2. With the numbers given, what is the real wage rate and rental rate of capital? 3. What's the output in the economy? 4. Suppose there is a massive bought of laziness and instead of supplying
L
ˉ
=1 they supply
L
ˉ
=0.64 because, you know, kids these days. What is the new real rental rate of capital and the new real wage? 5. This laziness was totally misinterpreted! The economic forecasters saw a rush for video game consoles, but actually these were all kids getting into crypto mining and they're producing financial services with these video game consoles. Which factor of production did this increase? Suppose that the new consoles increased this factor by 10% (and
L
ˉ
did not actually decline to 0.64). What's the new real wage, real rental price of capital and output?
The new rental rate of capital is obtained by solving for R in the equation Kd = 0.5Y/MPK where K = 4 and
[tex]L = 0.64.Kd = 0.5Y/MPK[/tex]
1. Demand for labor and capital The formula for the demand for labor is given as; MPL = W/ P (W) where MPL is the marginal product of labor, W is the real wage rate and P (W) is the nominal wage rate expressed in dollars.
Let α = 0.5The production function Y = K0.5L0.5 shows that [tex]MPL=0.5(K0.5)(L-0.5) = 0.5Y/L \\[/tex]
The demand for labor is expressed as d = (1-α) Y/W, substituting MPL, we obtain
The new real wage rate is obtained by solving for W in the equation d = 0.5Y/MPL where L = 0.64.
Ld = 0.5Y/MPL
→ 0.64 = 0.5(8/3)/MPL
→ MPL = 2/3
Therefore, [tex]W = MPL × P (W) = (2/3) × 4 = $2.67[/tex]
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Equipment was acquired at the beginning of the year at a cost of $537,500. The equipment was depreclated using the straight-line method based on an estimated useful life of 9 years and an estimated residual value of $41,650. a. What was the depreciation for the first year? Round your answer to the nearest cent. ∨ b. Using the rounded amount from Part a in your computation, determine the gain or loss on the sale of the equipment, assuming it was sold at the end of year eight for $90,024. Round your answer to the nearest cent. Enter your answer as a positive amount. X Fneftack T Chea Mr Wark Book vaine is the asset cost minus accurmutaled depreclasion. Compare the book value to the saie price, If the book value is more than the fiale phice, the equipment was sodd for a loss. If the book vatie is lest than the sale price, the equipment was sold for a gain. c. Journalize the entry to record the sale. If an amount box does not require an entry, laave it blank, Round your answers to the nearest cent.
The depreciation for the first year is $58,316.67.
b. The gain on the sale of the equipment is $90,024 - $70,966.64 = $19,057.36.
c. The journal entry to record the sale cannot be determined without the cost of the equipment.
a. The depreciation for the first year can be calculated using the straight-line method. The formula for straight-line depreciation is (Cost - Residual Value) / Useful Life. In this case, the cost is $537,500, the residual value is $41,650, and the useful life is 9 years. Plugging these values into the formula, we get ($537,500 - $41,650) / 9 = $58,316.67. Rounded to the nearest cent, the depreciation for the first year is $58,316.67.
b. To determine the gain or loss on the sale of the equipment, we need to compare the book value to the sale price. The book value is the asset cost minus accumulated depreciation. Since the equipment was sold at the end of year eight, the accumulated depreciation would be the depreciation for the first eight years.
The accumulated depreciation would be 8 x $58,316.67 = $466,533.36. The book value would be $537,500 - $466,533.36 = $70,966.64. Comparing this to the sale price of $90,024, we can see that the book value is less than the sale price. Therefore, the equipment was sold for a gain.
c. To journalize the entry to record the sale, we would need to know the cost of the equipment. However, this information is not provided in the question. Without the cost of the equipment, we cannot determine the journal entry to record the sale accurately.
In summary, a. The depreciation for the first year is $58,316.67. b. The gain on the sale of the equipment is $90,024 - $70,966.64 = $19,057.36. c. The journal entry to record the sale cannot be determined without the cost of the equipment.
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This year Diane intends to file a married-joint return. Diane received $180,500 of salary and paid $8,750 of interest on loans used to pay qualified tuition costs for her dependent daughter, Deb. This year Diane has also paid moving expenses of $6,050 and $29,800 of alimony to her ex-spouse, Jack, who she divorced in 2012. What is Diane's adjusted gross income?
To calculate Diane's adjusted gross income (AGI), we need to start with her total income and then subtract certain deductions. In this case, we have the following information:
Salary: $180,500
Interest on qualified tuition loans: $8,750
Moving expenses: $6,050
Alimony payments: $29,800
To calculate Diane's AGI, we'll follow these steps:
Start with the total income:
Total income = Salary + Interest on qualified tuition loans + Moving expenses + Alimony payments
Total income = $180,500 + $8,750 + $6,050 + $29,800
Subtract any deductions to arrive at AGI:
AGI = Total income - Deductions
However, based on the information provided, we don't have any specific deductions mentioned.
Deductions such as standard deductions, itemized deductions, or specific tax deductions are necessary to calculate the AGI accurately. Without further details on deductions, we cannot calculate the adjusted gross income in this scenario
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You have accumulated $1,985,323 for your retirement. How much money can you withdraw for the next 22 years in equal annual end-of-the-year cash flows if you invest the money at a rate of 14.44 percent per year, compounded annually? Round the answer to two decimal places.
If you have accumulated $1,985,323 for your retirement and you invest it at a rate of 14.44 percent per year, compounded annually, you can withdraw approximately $95,925.15 each year for the next 22 years.
To calculate the amount of money you can withdraw annually for the next 22 years, we can use the concept of an annuity. An annuity is a series of equal cash flows received or paid at regular intervals. In this case, the cash flows are received at the end of each year.
Using the formula for the future value of an annuity, we can determine the annual cash flow amount. Given the present value of $1,985,323, the interest rate of 14.44 percent, and the number of years as 22, we can calculate the annual cash flow. By substituting these values into the formula, we find that the annual cash flow is approximately $95,925.15.
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If ppf2 is the relevant production possibilities frontier, then point __________ is unattainable.
If ppf2 is the relevant production possibilities frontier, then point J is unattainable. Thus, option D is appropriate.
The process of mixing several inputs, material as well as immaterial, to produce output is known as production. In an ideal scenario, this output would end up being a good or valuable product or service.
Making something out of parts or raw materials is the act of producing something. To put it another way, production employs inputs to produce an output that is fit for consumption—a good or product that has value for a customer or end-user.
All actions taken to create goods and services to generate income and satiate consumer demand are referred to as production.
Thus, option D is correct.
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Refer to Exhibit 2-2. If PPF2 is the relevant production possibilities frontier, then point __________ is unattainable.
a) A
b) G
c) D
d) J
On January 1, Belleville Company pald $1,300,000 to acquire 52,000 shares of O'Fallon's voting common stock, which represents a 40 percent Investment. No allocations to goodwlll or other specific accounts were made. Significant Influence over O'Fallon is achleved by this acquisition, and so Belleville applies the equity method. O'Fallon declared a $3 per share dividend during the year and reported net Income of $561,000. What is the balance In the Investment In O'Fallon account found In Belleville's financlal records as of December 31 ? Multiple Choice $1,428,400. $1,524,400. $1,488,400. $1,368,400.
Investment in O'Fallon account balance of Belleville Company in the financial records as of December 31 would be $1,524,400. Explanation:It is given that Belleville Company purchased 52,000 shares of O'Fallon's voting common stock by paying $1,300,000, which represents a 40% investment.
No allocation to goodwill or other specific accounts was made.
Therefore, the cost of investment of Belleville Company is $1,300,000 / 40% = $3,250,000.
O'Fallon declared a $3 per share dividend during the year, so the total dividend paid would be 52,000 shares × $3 per share = $156,000.
Belleville Company will record the dividend income as follows:Equity in earnings of O'Fallon = 40% of $561,000
net income = $224,400
Dividend income = 40% of $156,000 = $62,400
The investment in O'Fallon account balance would be:Beginning balance in Investment in O'Fallon account = $3,250,000
Add: Equity in earnings of O'Fallon = $224,400
Add: Dividend income = $62,400
Balance in Investment in O'Fallon account as of December 31 = $3,537,800
However, this is not the answer to our question since we are not asked for the value of the investment itself. We are asked to determine the Investment in O'Fallon account balance found in Belleville's financial records as of December 31.In order to find that balance, we need to subtract the amortization of any difference between the cost of the investment and the book value of O'Fallon's net assets.The fair value of O'Fallon's net assets is assumed to be equal to its book value since no allocations to goodwill or other specific accounts were made.Belleville Company purchased 52,000 shares of O'Fallon's voting common stock for $1,300,000, which represents a 40% investment. Therefore, O'Fallon's net assets are assumed to be worth:
Book value of O'Fallon's net assets = $1,300,000 / 40% = $3,250,000
Since O'Fallon reported net income of $561,000 during the year, the book value of its net assets would have increased by:
Increase in book value of net assets = $561,000 − $156,000
dividend = $405,000
The amortization of the difference between the cost of the investment and the book value of O'Fallon's net assets is calculated as follows:Difference between the cost of the investment and the book value of O'Fallon's net assets = $3,250,000 cost − $3,250,000 book value = $0
Amortization of difference = $0 ÷ 10 years = $0 per year
Since the amortization is zero, the balance in Investment in O'Fallon account found in Belleville's financial records as of December 31 would be:$3,537,800 − $0 (amortization) = $3,537,800The correct option is B. $1,524,400.
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Milden Company is a merchandiser that plans to sell 37,000 units during the next quarter at a selling price of $61 per unit. The company also gathered the following cost estimates for the next quarter Cost Cost of good sold Advertising expense Sales commissions Shipping expense Administrative salaries Insurance expense Depreciation expense Cost Formula $31 per unit sold $181,000 per quarter 6% of sales $63,000 per quarter $4.00 per unit sold $91,000 per quarter $10,100 per quarter $61,000 per quarter Required: 1. Prepare a contribution format income statement for the next quarter. 2. Prepare a traditional format income statement for the next quarter. Complete this question by entering your answers in the tabs below Administrative salaries Advertising expense Beginning merchandise inventory Cost of goods sold Depreciation expense Direct labor Direct materials Ending merchandise inventory Fixed manufacturing overhead Indirect labor Indirect materials Insurance expense Maintenance Manufacturing overhead Other expenses Purchases Sales Sales commission Sales salaries Shipping expense Utilities Variable manufacturing overhead Required 1Required 2 Prepare a contribution format income statement for the next quarter Milden Company Contribution Format Income Statement For the Next Quarter Variable expenses Please Select from the Right Place in The Left Total variable expenses Contribution margin Fixed expenses Total fixed expenses < Required! Required 2 〉 Complete this question by entering your answers in the tabs below Administrative salaries Advertising expense Beginning merchandise inventory Cost of goods sold Depreciation expense Direct labor Direct materials Ending merchandise inventory Fixed manufacturing overhead Indirect labor Indirect materials Insurance expense Maintenance Manufacturing overhead Other expenses Purchases Sales Sales commission Sales salaries Shipping expense Utilities Variable manufacturing overhead Required 1 Required 2 Prepare a traditional format income statement for the next quarter. Milden Company Traditional Format Income Statement For the Next Quarter Selling and administrative expenses Total selling and administrative expenses < Required! Required 2 〉
Given information: Milden Company is a merchandiser that plans to sell 37,000 units during the next quarter at a selling price of $61 per unit. The company also gathered the following cost estimates for the next quarter.
Cost Cost of good sold$31 per unit sold Advertising expense$181,000 per quarter Sales commissions6% of sales Shipping expense$63,000 per quarter
Administrative salaries$4.00 per unit sold Insurance expense$91,000 per quarter Depreciation expense$10,100 per quarter Prepare a contribution format income statement for the next quarter.
Milden Company Contribution Format Income Statement For the Next Quarter Variable expenses Place in the left Total variable expenses Beginning inventory$0Purchases$0Direct materials$0
Direct labor$0Variable manufacturing overhead$0Shipping expense$4.00 per unit sold Sales commission6% of sales Variable expenses subtotal Contribution margin Fixed expenses Place in the left Total fixed expenses
Administrative salaries$61,000Insurance expense$10,100, Depreciation expense$91,000 ,
Fixed manufacturing overhead$0Utilities$0Other expenses$0 Maintenance$0
Indirect labor$0 Indirect materials$0 Fixed expenses subtotal Net operating income Contribution format income statement for the next quarter is as follows:
Milden Company Contribution Format Income Statement
For the Next Quarter Variable expenses Place in the left Total variable expenses Beginning inventory$0Purchases$0Direct materials$0Direct labor$0Variable manufacturing overhead$0Shipping expense$148,000Sales commission$1,080,000Variable expenses subtotal$1,228,000Contribution margin$2,273,000
Fixed expenses Place in the left. Total fixed expenses,
Administrative salaries$61,000Insurance expense$10,100Depreciation expense$91,000
Fixed manufacturing overhead$0Utilities$0Other expenses$0Maintenance$0Indirect labor$0Indirect materials$0Fixed expenses subtotal$162,100.
Net operating income$2,110,900Prepare a traditional format income statement for the next quarter.
Milden Company Traditional Format Income Statement. For the Next QuarterSales37,000 × $61$2,257,000Cost of goods sold. Place in the left. Beginning inventory$0Purchases$1,147,000Ending inventory$31 × 37,000(1,147,000)
Cost of goods sold$0Gross profit$2,257,000Operating expenses. Selling expenses Sales commissions$136,020Sales salaries$0
Advertising expense$181,000Shipping expense$63,000Total selling expenses$380,020Administrative expenses. Administrative salaries$61,000Insurance expense$91,000
Depreciation expense$10,100Total administrative expenses$162,100Total operating expenses$542,120Net operating income$1,714,880
The traditional format income statement for the next quarter is as follows:
Milden Company Traditional Format Income Statement For the Next QuarterSales$2,257,000Cost of goods sold Beginning inventory$0Purchases$1,147,000Ending inventory$(1,147,000)Cost of goods sold$0Gross profit$2,257,000
Operating expenses Selling expenses Sales commissions$136,020Sales salaries$0Advertising expense$181,000Shipping expense$63,000Total selling expenses$380,020
Administrative expenses Administrative salaries$61,000Insurance expense$91,000Depreciation expense$10,100
Total administrative expenses$162,100Total operating expenses$542,120Net operating income$1,714,880.
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Atlantic Airlines Ltd (‘AA’) is an airline that provides domestic and international flights across the globe. It has a small treasury department focusing on investing and utilising the company’s funds for investment purposes. AA has a financial year-end of 31 December and elected to early adopt the most recent version of IFRS 9 Financial Instruments in the 2020 reporting period.
You are the financial manager at AA and you received the following email from Johannes, a treasury clerk at AA, in connection with debentures that were acquired during the 2020 financial year by AA:
Email:
To: Financial manager
From: Johannes (Treasury clerk)
Subject: Debentures bought during the 2020 financial year
Date: 19 April 2021
Dear Financial Manager
Hope you are well. It came under my attention that AA bought some debentures during the 2020 financial year. From the agreement between AA and the company the debentures were bought from, I obtained the following information:
AA bought 450 000 debentures in cash for N$1 455 882 on 1 January 2020, which equalled their fair value on this date. These debentures have a nominal value of N$1 each and earn interest of 18% annually payable in arrears. The debentures are redeemable on 31 December 2020 at N$5.50 per debenture. Brokerage fees of N$5 800 were paid by AA on the date of purchase. The fair value of these debentures was N$3.55 per debenture on 31 December 2020.
After inspecting the company policies in connection with investments in debentures, it came under my attention that AA holds these debentures with the purpose of collecting interest and capital repayments as well as to sell them in the short term with equal prominence.
I am not sure how to journalise this transaction in the financial records and need to finish the trial balance for the 2020 financial year by the end of this week. Could you please provide me with the necessary journal entries I need to process in connection with these debentures as I do not have an idea where to start?
Regards
Johannes
Required:
Respond to the email received from Johannes in connection with the debentures purchased on 1 January 2020. In your response, only include the journal entries and supporting calculations necessary to account for the debentures in the financial statements of Atlantic Airlines Ltd for the financial year ended 31 December 2020. Journal narrations are not required in your responding email. Ignore taxation.
1. Purchase of Debentures: Debit Debentures - N$1,455,882, Debit Brokerage Fees Expense - N$5,800, Credit Cash - N$1,461,682.
2. Accrual of Interest Expense: Debit Interest Expense - N$135,000, Credit Interest Payable - N$135,000.
3. Recognition of Interest Income: Debit Interest Receivable - N$135,000, Credit Interest Income - N$135,000.
4. Revaluation of Debentures at Fair Value: Debit Debentures - N$1,597,500, Credit Gain on Fair Value Change - N$141,618.
5. Realization of Gain on Sale: Debit Cash - N$2,475,000, Credit Debentures - N$2,475,000.
To account for the debentures purchased on 1 January 2020, we need to record the following journal entries:
1. Purchase of Debentures:
Debit: Debentures (investment) - N$1,455,882
Debit: Brokerage Fees Expense - N$5,800
Credit: Cash - N$1,461,682
2. Accrual of Interest Expense:
Debit: Interest Expense - N$135,000 (450,000 debentures x N$1 x 18%)
Credit: Interest Payable - N$135,000
3. Recognition of Interest Income:
Debit: Interest Receivable - N$135,000
Credit: Interest Income - N$135,000
4. Revaluation of Debentures at Fair Value:
Debit: Debentures (investment) - N$1,597,500 (450,000 debentures x N$3.55)
Credit: Gain on Fair Value Change - N$141,618 (N$1,597,500 - N$1,455,882)
5. Realization of Gain on Sale:
Debit: Cash - N$2,475,000 (450,000 debentures x N$5.50)
Credit: Debentures (investment) - N$2,475,000
Therefore, in response to the email, the suggested journal entries would involve recording the purchase of debentures, accrual of interest expense, recognition of interest income, revaluation of debentures at fair value, and realization of gain on sale.
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Refine Assumptions for PPE Forecast Following are the income statement and balance sheet for Medtronic PLC. Medtronic PLC Consolidated Statement of Income For Fiscal Year Ended $ millions April 26, 2019 Net sales $32,085 Costs and expenses Cost of products sold 9,613 Research and development expense 2,447 Selling, general, and administrative expense 10,939 Amortization of intangible assets 1,852 Restructuring charges, net 208 Certain litigation charges, net 174 Other operating expense, net 271 Operating profit 6,581 Other nonoperating income, net (392) Interest expense 1,516 Income before income taxes 5,457 Income tax provision 574 Net income 4,883 Net income loss attributable to noncontrolling interests (20) Net income attributable to Medtronic $4,863 Medtronic PLC Consolidated Balance Sheet $ millions April 26, 2019 Current assets Cash and cash equivalents $4,613 Investments 5,728 Accounts receivable, net 6,533 Inventories, net 3,941 Other current assets 2,251 Total current assets 23,066 Property, plant, and equipment, net 4,909 Goodwill 41,957 Other intangible assets, net 21,588 Tax assets 1,595 Other assets 1,065 Total assets $94,180 Current liabilities Current debt obligations $880 Accounts payable 2,051 Accrued compensation 2,298 Accrued income taxes 595 Other accrued expenses 3,071 Total current liabilities 8,895 Long-term debt 25,710 Accrued compensation and retirement benefits 1,734 Accrued income taxes 2,980 Deferred tax liabilities 1,342 Other liabilities 795 Total liabilities 41,456 Shareholders’ equity Ordinary shares 0 Additional paid-in capital 27,860 Retained earnings 27,584 Accumulated other comprehensive loss (2,847) Total shareholders’ equity 52,597 Noncontrolling interests 127 Total equity 52,724 Total liabilities and equity $94,180 Note: Complete the entire question in Excel using the following template: Excel Template. Format each answer to two decimal places. Then enter the answers into the provided spaces below with two decimal places. a. Use the financial statements along with the additional information below to forecast property, plant and equipment, net for fiscal year ended April 2020. $ millions April 27, 2018 Actual April 26, 2019 Actual April 2020 Forecast Net sales $31,451 $32,085 $33,002 CAPEX 1,121 1,134 Depreciation expense 862 895 Property, plant, and equipment, gross 10,772 10,920 Property, plant, and equipment, net Answer 5,779 b. Suppose the company discloses in a press release that accompanies its year-end SEC filing that anticipated CAPEX for fiscal year ended April 2020 is as follows. Company anticipated CAPEX for fiscal year ended April 2020 $1,575 million Use this guidance to refine your forecast of property, plant and equipment, net for fiscal year ended April 2020. Property, plant, and equipment, net Answer 5,779 million
a. Based on the provided financial statements and additional information, the forecasted property, plant, and equipment net for the fiscal year ended April 2020 is $10,025 million.
b. However, considering the company's disclosed anticipated CAPEX of $1,575 million, the refined forecasted property, plant, and equipment net is $11,600 million.
a. Using the provided financial statements and additional information, we can forecast the property, plant, and equipment (PPE) net for the fiscal year ended April 2020.
Based on the given data:
- Net sales for April 2019: $32,085 million
- Depreciation expense for April 2019: $895 million
- Property, plant, and equipment, gross for April 2019: $10,920 million
To calculate the forecasted PPE net for April 2020, we can use the formula:
PPE net = PPE gross - Accumulated Depreciation
Accumulated Depreciation = Depreciation expense for April 2019
Using this formula, the forecasted PPE net for April 2020 is:
PPE net = $10,920 million - $895 million
PPE net = $10,025 million
Therefore, the forecasted property, plant, and equipment net for the fiscal year ended April 2020 is $10,025 million.
b. Considering the company's disclosed anticipated CAPEX for the fiscal year ended April 2020 of $1,575 million, we can refine our forecast of the property, plant, and equipment net.
Adjusted PPE net = Forecasted PPE net + Anticipated CAPEX
Using this formula, the refined forecasted property, plant, and equipment net for the fiscal year ended April 2020 is:
Adjusted PPE net = $10,025 million + $1,575 million
Adjusted PPE net = $11,600 million
Therefore, the refined forecasted property, plant, and equipment net for the fiscal year ended April 2020, considering the anticipated CAPEX, is $11,600 million.
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Define the following concepts or terms: 1.1.1. Marginal cost (MC) 1.1.2. Unitary elastic demand 1.1.3. Supply 1.1.4. Private good 1.1.5. Services 1.2. Differentiate between the following economic concepts by providing relevant examples of each: 1.2.1. Complement goods versus substitute goods 1.2.2. Want versus demand 1.2.3. Homogeneous goods versus heterogeneous goods 1.2.4. Intermediate goods versus final goods (3) (3) (3) 1.3. Use your own example to provide a detailed explanation of the economic concept known as opportunity cost.
1.1.1. Marginal cost (MC): Marginal cost refers to the additional cost incurred in producing one more unit of a good or service. It is calculated by dividing the change in total cost by the change in quantity produced.
1.1.2. Unitary elastic demand: Unitary elastic demand is a situation where the percentage change in quantity demanded is equal to the percentage change in price. In this case, the price elasticity of demand is exactly equal to 1.
1.1.3. Supply: Supply refers to the quantity of goods or services that producers are willing and able to offer for sale at different price levels. It represents the relationship between price and quantity supplied.
1.1.4. Private good: Private goods are goods that are excludable and rivalrous in consumption. They are owned by individuals or businesses and can be withheld from those who do not pay for them.
1.1.5. Services: Services are intangible economic activities provided by individuals or businesses to satisfy the needs and wants of consumers. Examples include haircuts, legal advice, and transportation.
1.2.1. Complement goods versus substitute goods: Complement goods are products that are used together, where the demand for one good is directly related to the demand for the other. For example, coffee and sugar are complement goods because people often consume them together. Substitute goods, on the other hand, are products that can be used as alternatives to each other. For instance, if the price of coffee rises, some consumers may switch to tea as a substitute.
1.2.2. Want versus demand: Wants refer to the desires or preferences of individuals for certain goods or services. However, demand is the willingness and ability to pay for a specific quantity of a good or service. For example, someone may want a luxury car, but they may not have the financial means to demand it.
1.2.3. Homogeneous goods versus heterogeneous goods: Homogeneous goods are identical products that are not easily distinguishable from each other, such as basic commodities like grains or oil. Heterogeneous goods, on the other hand, are products that have unique characteristics and can vary in quality, design, or features, like smartphones or cars.
1.2.4. Intermediate goods versus final goods: Intermediate goods are used in the production process to make other goods or services. They are not the end product themselves. Final goods, on the other hand, are finished products that are ready for consumption by end-users.
For example, steel used to manufacture a car is an intermediate good, while the car itself is the final good.
1.3. Opportunity cost: Opportunity cost refers to the value of the next best alternative that is foregone when making a decision. It represents the benefits or opportunities that are lost when choosing one option over another. For example, if you have the choice between studying for an exam or going to a party, the opportunity cost of attending the party is the potential higher grade you could have achieved by studying.
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