When the actual aggregate output is higher than the potential output, it implies an inflationary gap, indicating that the economy is operating above its long-term sustainable level. To address this situation, the government should impose a stabilization policy that decreases aggregate demand. Therefore, option D, which states "decreases aggregate demand," is the correct choice.
An inflationary gap occurs when the actual aggregate output (GDP) exceeds the potential output (the level of output the economy can sustain in the long run without causing inflationary pressures). When the economy operates beyond its potential output, it can lead to overheating, excessive demand, and upward pressure on prices.
To mitigate the inflationary gap and bring the economy back to a sustainable level, the government should implement a stabilization policy that decreases aggregate demand. Decreasing aggregate demand can be achieved through various measures, such as:
1. Monetary Policy: The central bank can increase interest rates to discourage borrowing and spending, which reduces consumption and investment, thereby decreasing aggregate demand.
2. Fiscal Policy: The government can implement contractionary fiscal measures, such as reducing government spending or increasing taxes, which reduces overall demand in the economy.
By decreasing aggregate demand, the government aims to align the actual output with the potential output, reducing inflationary pressures and promoting long-term stability.
When the actual aggregate output exceeds the potential output, the government should implement a stabilization policy that decreases aggregate demand. This helps to address the inflationary gap and brings the economy back to a sustainable level, reducing the risk of overheating and inflationary pressures. Decreasing aggregate demand can be achieved through measures such as tightening monetary policy or implementing contractionary fiscal measures.
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5. ______________unemployment would occur in winter with ice-cream
bicycle sellers.
(a) Seasonal
(b) Frictional
(c) Structural
(d) Demand-deficient
6. A vertical supply curve may be described as…
(a) Relatively elastic
(b) Perfectly elastic
(c) Relatively inelastic
(d) Perfectly inelastic
Seasonal unemployment would occur in winter with ice-cream bicycle sellers. Seasonal unemployment is one of the types of unemployment.
It occurs when the demand for labor in certain industries changes on a seasonal basis. Employment is high during the seasons when the demand for the goods or services produced is high, and employment is low during the seasons when the demand for goods or services produced is low.
The demand for ice cream increases in the summer months, so ice-cream bicycle sellers hire more employees to meet the increasing demand. However, the demand for ice cream decreases in the winter months, so ice-cream bicycle sellers lay off workers because they don't need them during that time.
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1. A TV company purchased a machinery for P 100,000.00 on July 1 , 2015. It is estimated that it will have a useful life of 10 years; scrap value of P4,000.00; production of 400,00 units and working hours of 120,000 . The company uses the machinery for 14,000 hours in 2015 and 18,000 hours in 2016 . The machinery produces 36,000 units in 2015 and 44,000 units in 2016. Compute the depreciation for 2016 using each method given below: a. Straight Line Method(SLM) b. Working Hours c. Output method
The depreciation for 2016 using each method is as follows:
a. Straight Line Method (SLM): P9,600
b. Working Hours Method: P14,400
c. Output Method: P10,560
To calculate the depreciation for 2016 using different methods, first determine the annual depreciation expense for the machinery.
a. Straight Line Method (SLM):
Under the Straight Line Method, the annual depreciation expense is calculated by dividing the difference between the purchase cost and the scrap value by the useful life of the machinery.
Depreciation per year = (Purchase cost - Scrap value) / Useful life
Depreciation per year = (P100,000 - P4,000) / 10 years
Depreciation per year = P9,600
b. Working Hours Method:
Under the Working Hours Method, the depreciation expense is calculated based on the number of hours the machinery is used.
Depreciation per hour = (Purchase cost - Scrap value) / Total working hours
Depreciation per hour = (P100,000 - P4,000) / 120,000 hours
Depreciation per hour = P0.8 per hour
Depreciation for 2016 = Depreciation per hour × Total hours used in 2016
Depreciation for 2016 = P0.8/hour × 18,000 hours
Depreciation for 2016 = P14,400
c. Output Method:
Under the Output Method, the depreciation expense is calculated based on the number of units produced by the machinery.
Depreciation per unit = (Purchase cost - Scrap value) / Total units expected to be produced
Depreciation per unit = (P100,000 - P4,000) / 400,000 units
Depreciation per unit = P0.24 per unit
Depreciation for 2016 = Depreciation per unit × Units produced in 2016
Depreciation for 2016 = P0.24/unit × 44,000 units
Depreciation for 2016 = P10,560
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View Policies Show Attermpt History Current Attempt in Progress Shetheld Inc. owns the following long tived assets: (a) straight-fine depreciation and adjusts its accounts annually. Alst alf detit entries before crewit entries Crecht account tiliesior Prepare depreciation adiusting entries for each asset for the year ended December 31. 2021, assuming the company uses straight-line depreciation and adjusts its accounts annually. Cist all debit entries before credit entries. Credit occount tittes are outomaticolly indented when the amount is entered. Do nat indent manually. If no entry is required, select "No Entry" for the occount tities and enter 0 for the amounts. Record journal entries in the order preiented in the problemn. For each asset. calculate its accumulated depreciation and carrying amount at December 31, 2021.
To prepare depreciation adjusting entries for each long-lived asset owned by Shetheld Inc. for the year ended December 31, 2021, assuming straight-line depreciation and annual adjustments.
The following general journal entries would be made:
(a) Asset 1:
Depreciation Expense $X
Accumulated Depreciation - Asset 1 $X
(b) Asset 2:
Depreciation Expense $X
Accumulated Depreciation - Asset 2 $X
(c) Asset 3:
Depreciation Expense $X
Accumulated Depreciation - Asset 3 $X
In each entry, the Depreciation Expense account is debited, reflecting the expense for the year, and the respective Accumulated Depreciation account is credited, indicating the increase in accumulated depreciation for the asset.
To calculate the accumulated depreciation and carrying amount at December 31, 2021, you would need the historical cost of each asset and the number of years it has been in service. Accumulated depreciation is the sum of all depreciation expenses recorded over the years, while the carrying amount is the historical cost minus the accumulated depreciation.
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Which of the following are USES of cash? An increase in an asset An increase in a liability A decrease in a non-cash asset An increase in stockholder's equity Question 8 1pts Integrated Manufacturing Inc. sells a variety of different SKU's to both business customers and consumers. Last year they sold $40 million worth of product. Their cost of goods sold for the same period was $24 million. Their accounts payable averages $6 million at any point in time, while their accounts receivable averages $8 million. After a tremendous effort to lean-out the business, the inventory has dropped to $2 million and is expected to remain at that level for the foreseeable future. What are Integrated Manufacturing Inc.'s inventory turns? (Round to 4 decimal places and assume a year has 365 days for any calculations involving the number of days in a year).
There are various uses of cash; increase in asset, increase in liability, decrease in non-cash assets, increase in stockholder's equity. Inventory turns is 12 times. Integrated Manufacturing Inc. sold its inventory 12 times in the year, with an average of 30.42 days (365 days divided by 12) required for the sale of the inventory.
There are various uses of cash, as follows; An increase in asset: It is one of the uses of cash, and it helps to increase the cash balance of the company.
An increase in liability: It is another use of cash, which refers to an increase in the cash balance due to liabilities taken by the company.
A decrease in non-cash assets: It is another use of cash, which helps to increase the cash balance by reducing the value of non-cash assets.
An increase in stockholder's equity: It is another use of cash, which helps to increase the cash balance through additional capital investments by the shareholders.
Inventory turns: Inventory turns refer to the number of times the inventory is sold and replaced during a specific period.
The formula to calculate inventory turns is as follows:
Inventory turns = Cost of goods sold / Average inventory
Therefore, Inventory turns = $24,000,000 / $2,000,000 = 12 times (rounded to nearest whole number)
The inventory turnover ratio is a measure of the company's efficiency in managing inventory, as it helps to determine the frequency with which a company sells its inventory and replaces it.
This indicates that Integrated Manufacturing Inc. sold its inventory 12 times in the year, with an average of 30.42 days (365 days divided by 12) required for the sale of the inventory.
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Bakwena co. purchased 80% of equity shares in Kgale Co. on 1 January 2021. The following items are extracted from the above companies as on 31 December 2021.Bakwena Co. Trade receivables $250,000
Trade payables $350,000
Kgale Co. Trade receivables $150,000
Trade Payables $210,000
In the above receivables of Bakwena co. includes an amount due from Kgale Co of $23,000. Kgale Co has a corresponding payable balance.
Required,
Show the consolidated amount for trade receivables and payables in the financial statement.
To show the consolidated amount for trade receivables and payables in the financial statement, we need to combine the balances of Bakwena Co. and Kgale Co. Let's calculate the consolidated amounts:
Consolidated Trade Receivables:
Bakwena Co. Trade Receivables: $250,000
Kgale Co. Trade Receivables: $150,000 (excluding the amount due from Bakwena Co.)
Amount due from Kgale Co. to Bakwena Co.: $23,000
Consolidated Trade Receivables = Bakwena Co. Trade Receivables + Kgale Co. Trade Receivables - Amount due from Kgale Co. to Bakwena Co.
Consolidated Trade Receivables = $250,000 + $150,000 - $23,000
Consolidated Trade Receivables = $377,000
Therefore, the consolidated amount for trade receivables in the financial statement is $377,000.
Consolidated Trade Payables:
Bakwena Co. Trade Payables: $350,000
Kgale Co. Trade Payables: $210,000 (including the corresponding payable balance for Bakwena Co.)
Consolidated Trade Payables = Bakwena Co. Trade Payables + Kgale Co. Trade Payables
Consolidated Trade Payables = $350,000 + $210,000
Consolidated Trade Payables = $560,000
Therefore, the consolidated amount for trade payables in the financial statement is $560,000.
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Under frost-free conditions, Cal Cultivators expects its strawberry crop to have a $60,000 market value. An unprotected crop subject to frost has an expected market value of $40,000. If Cal protects the strawberries against frost, then the market value of the crop is still expected to be $60,000 under frost-free conditions and $90,000 if there is a frost. What must be the probability of a frost for Cal to be indifferent to spending $10,000 for frost protection?
5. Questo borrowed $100,000 from a bank on a one-year 8% term loan, with interest compounded quarterly. What is the effective annual interest rate on the loan?
Question 1:Under frost-free conditions, Cal Cultivators expects its strawberry crop to have a $60,000 market value. An unprotected crop subject to frost has an expected market value of $40,000.
If Cal protects the strawberries against frost, then the market value of the crop is still expected to be $60,000 under frost-free conditions and $90,000 if there is a frost. What must be the probability of a frost for Cal to be indifferent to spending $10,000 for frost protection?Answer:Cal Cultivators expects its strawberry crop to have a $60,000 market value. When it is protected, the market value is still expected to be $60,000 under frost-free conditions and $90,000 if there is a frost.
Thus, the expected return from frost protection is 0.5 ($90,000 − $60,000) = $15,000.If Cal doesn't protect the crop, the expected return is $60,000 − $40,000 = $20,000. By protecting the strawberries, Cal is taking the risk of a $10,000 loss, but it is also taking the opportunity to gain an additional $5,000 profit. To be indifferent between taking this risk and not taking it, Cal must believe that the probability of a frost is 0.3333 or less.Question 2:Questo borrowed $100,000 from a bank on a one-year 8% term loan, with interest compounded quarterly.
What is the effective annual interest rate on the loan?Answer:Effective annual rate (EAR) is the interest rate actually earned or paid on an investment or loan once the effects of compounding interest are accounted for. In order to calculate the effective annual interest rate on the loan of Questo, we use the following formula:EAR = (1 + i/m)m - 1Where, i = nominal annual interest rate, m = number of compounding periods per yearFor the given problem, i = 8%, m = 4 (quarterly), and the amount borrowed is $100,000.EAR = (1 + i/m)m - 1EAR = (1 + 8%/4)4 - 1EAR = (1 + 0.02)4 - 1EAR = (1.02)4 - 1EAR = 8.24%Thus, the effective annual interest rate on Questo's loan is 8.24%.
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a) In the context of an IPO, what do the terms "underpricing" and "money left on the table" imply? (5 marks) b) What will be the EAR on a $125,000 mortgage loan that has an interest rate of 6% per annum and is taken with 2 discount points? Assume that the borrower will not prepay the loan. The term of the loan is 30 years. (5 marks) c) You observe the following FOREX quotes: Yen 80/$ $0.5/SF \$0.5/SF What is the cross rate between Yen and SF (2 marks) d) What effect would be reducing income tax rates have on the interest rates of municipal bonds? Would interest rates of Treasury securities be affected and if so, how? (3 marks)
a)In the context of an IPO, the term "under pricing" implies that the issue price of the share is lower than the price at which the shares begin trading on the stock exchange. This means that the investors are getting a bargain in the form of an undervalued stock. The term "money left on the table" implies that the investment bank could have priced the shares higher and hence could have generated more funds for the company going public.
b) The EAR on a $125,000 mortgage loan that has an interest rate of 6% per annum and is taken with 2 discount points is 6.20 percent.
c) The cross rate between Yen and SF is SF 160/¥.
d) Reducing income tax rates would result in lower yields on municipal bonds. The interest rates on treasury securities would be affected if the tax rates are reduced as a result of a cut in the corporate income tax rate.
Under pricing refers to the process of setting a lower price for a new stock offering than the price that the stock trades at in the open market when it starts trading. The goal is to create an immediate rise in the stock's price and generate buzz surrounding the company. The more the price rises after its initial public offering, the more "money is left on the table."
The annual percentage rate (APR) reflects the interest rate, mortgage broker fees, and other fees charged by the lender in addition to the interest rate. The effective annual rate (EAR) calculates the interest rate based on the interest paid on a yearly basis, including any fees and costs associated with obtaining the loan. EAR = (1 + APR / N) ^ N - 1, where N = 12 months in a year.Using the formula, we can calculate the EAR:APR = 6%Discount Points = 2 pointsThe amount of the loan is $125,000.Duration of the loan is 30 years.N = 12EAR = (1 + 0.06 / 12) ^ 12 - 1EAR = 6.20%
To find the cross rate between yen and Swiss franc, we need to use the dollar as the middle currency because the two currencies aren't directly exchangeable.The yen/dollar exchange rate is 80 yen per dollar ($1 = ¥80).The dollar/Swiss franc exchange rate is $0.50 per franc (1 franc = $0.50).We can find the cross rate by multiplying the exchange rates:1 yen = $0.0125 (divide 1 by 80)1 franc = $2 (multiply 1 by 0.5)¥1 = $0.0125 × 2 = $0.025SF1 = ¥80 × $0.025 = $2The cross rate between yen and Swiss franc is SF 160/¥.
When income tax rates are lowered, there is a reduction in the amount of taxes owed on investment earnings. As a result, the effective after-tax return on investments such as municipal bonds would fall. In order to keep attracting investment, bond issuers would need to raise yields, resulting in lower bond prices. This is why lower tax rates result in lower municipal bond yields.On the other hand, if corporate tax rates are reduced, the after-tax cost of issuing debt decreases for corporations. This would result in corporations being able to issue debt at lower interest rates, which could lower Treasury yields. As a result, interest rates on Treasury securities could be impacted.
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Which of the following is always upward-sloping? a. The marginal cost curve when it is below the average total cost curve. b. The marginal cost curve when it is above the average total cost curve. c. The average fixed cost curve when it is below the marginal cost curve. d. The average total cost curve when it is above the marginal cost curve.
The correct answer is b. The marginal cost curve when it is above the average total cost curve is always upward-sloping.
The marginal cost curve represents the additional cost of producing one more unit of output, and when it is above the average total cost curve, it indicates that each additional unit of output adds more to the total cost than the average cost of all units produced. Therefore, the marginal cost curve will be upward-sloping in this scenario.
In economics, the concept of cost is crucial in understanding production and pricing decisions. Marginal cost refers to the additional cost incurred when producing one more unit of output, while average total cost represents the total cost per unit of output.
When the marginal cost curve is above the average total cost curve, it implies that each additional unit of output is adding more to the total cost than the average cost of all units produced. This means that the cost of producing additional units is higher than the average cost per unit.
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Requirement 2. Job 86 required the production of 180 bumpers and required one setup. Compute the indirect manufacturing cost allocated to \( 86 . \) Begin by selecting the formula to allocate overhead
The indirect manufacturing cost allocated to Job 86 is calculated by multiplying the predetermined overhead allocation rate by the expected quantity of the allocation base used.
To allocate indirect manufacturing costs to Job 86, we need to use the predetermined overhead allocation rate, which is calculated by dividing the total estimated manufacturing overhead costs by the estimated quantity of the allocation base. The allocation base is a measure that is used to allocate overhead costs to specific jobs or products. In this case, the allocation base could be the number of setups, direct labor hours, machine hours, or any other appropriate measure.
Once we have the predetermined overhead allocation rate, we multiply it by the expected quantity of the allocation base used for Job 86. The expected quantity can be determined based on the specific information provided for Job 86, such as the number of bumpers produced or the number of setups required.
By using this formula, we can calculate the indirect manufacturing cost allocated to Job 86, which represents its share of the total overhead costs based on the estimated usage of the allocation base.
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ABC company projects a ROE of 30% it will maintain a plowback ratio of 0.6. The firm is expecting a earning of R3 per share and investors expect a return of 15% on the stock what is expected price and P/E ratio of the firm
The expected price of ABC company's stock is R20 per share, and the price-to-earnings (P/E) ratio is 6.67. This estimation is based on the firm's projected return on equity (ROE) of 30%, a plowback ratio of 0.6, and investors' expected return of 15% on the stock.
To calculate the expected price, we can use the Gordon growth model, which states that the price of a stock equals the next expected dividend divided by the difference between the required return on equity and the expected growth rate. In this case, the expected dividend is R3 per share, the required return on equity is 15%, and the plowback ratio (b) is 0.6 (indicating that 60% of earnings will be reinvested). Therefore, the expected growth rate (g) can be calculated as b times the ROE, which is 0.6 multiplied by 30% (0.6 * 0.3 = 0.18 or 18%). Applying the Gordon growth model, the expected price per share is R3 divided by (0.15 - 0.18) = R20 per share.
The price-to-earnings (P/E) ratio can be obtained by dividing the expected price per share by the expected earnings per share. In this case, the expected earnings per share is R3. Hence, the P/E ratio is R20 divided by R3, which equals 6.67. The P/E ratio is a valuation metric used by investors to assess the relative value of a stock. A higher P/E ratio generally indicates that investors have higher expectations for the future growth and profitability of the company.
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the "act" part of the pdca cycle for project meetings is:
As per the PDCA Cycle, the "Act" part is the final stage, wherein the results of the previous cycle are examined to determine whether the project objectives have been achieved and the necessary corrective actions are taken to ensure that any deficiencies are addressed in the future.
It is a continuous cycle that promotes continuous improvement in the company. This allows a company to quickly determine whether a process is successful or not, and whether changes are required. It requires the collection and analysis of data, the identification of potential sources of improvement, the development of an action plan, and the implementation of that plan.
Furthermore, it is critical to monitor the results of the plan to ensure that the intended benefits are achieved, and the cycle is repeated.
In conclusion, The "Act" stage of the PDCA cycle in project meetings involves the evaluation of results and taking corrective actions if necessary.
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Using The Data In The Tables Below, Compute Net Cash Flow From Operating Activities For Eureka Ruby, Inc. For Year 2: Eureka Ruby, Incorporated Balance Sheets For The Years Ending December 31 , (All Amounts Are In Dollars) Additional Data From Company Income Statement(S): - Sales In Year 2=5,792,000 - Net Income In Year 2=33,410 - Depreciation Expense In
In order to compute the net cash flow from operating activities for Eureka Ruby, Inc. for Year 2, we will use the information provided in the given tables. The additional data from the company income statement are as follows:Sales in Year 2 = $5,792,000Net Income in Year 2 = $33,410Depreciation Expense in Year 2 = $10,840The formula to compute net cash flow from operating activities is as follows:Net Cash Flow from Operating Activities = Net Income + Depreciation - Change in Operating Assets + Change in Operating Liabilities We will now calculate each of the components of this formula:1. Net Income: The net income for Year 2 is given as $33,410. Therefore, we can write:Net Income = $33,4102. Depreciation: The depreciation expense for Year 2 is given as $10,840. Therefore, we can write:Depreciation = $10,8403. Change in Operating Assets: The change in operating assets is the difference between the current year's value and the previous year's value. In this case, we only have the data for Year 2, so we cannot calculate the change. Therefore, we can write:Change in Operating Assets = 04. Change in Operating Liabilities: The change in operating liabilities is the difference between the current year's value and the previous year's value. In this case, we only have the data for Year 2, so we cannot calculate the change. Therefore, we can write:Change in Operating Liabilities = 0Now, we can substitute these values in the formula to get the net cash flow from operating activities:Net Cash Flow from Operating Activities = Net Income + Depreciation - Change in Operating Assets + Change in Operating LiabilitiesNet Cash Flow from Operating Activities = $33,410 + $10,840 - 0 + 0Net Cash Flow from Operating Activities = $44,250Therefore, the net cash flow from operating activities for Eureka Ruby, Inc. for Year 2 is $44,250.
17. An apple computer is a substitute for a PC computer. What happens to the demand for PC computers and the quantity demanded for PC computers as the price of an Apple falls? 18. Describe how each of
As the price of Apple computers falls, the demand for PC computers decreases due to their status as substitute goods. Price elasticity, income elasticity, and cross elasticity of demand determine the responsiveness of quantity demanded to price changes, income changes, and changes in the price of related goods, respectively.
1. As the price of an Apple computer falls, the demand for PC computers will decrease. This is because Apple computers and PC computers are considered substitute goods, meaning they can be used interchangeably for similar purposes. When the price of Apple computers decreases, consumers will find them more affordable and attractive compared to PC computers. As a result, some consumers who were initially considering purchasing a PC computer may switch their preference to Apple computers, leading to a decrease in the demand for PC computers.
2. Price elasticity of demand measures the responsiveness of quantity demanded to changes in price. If a good has elastic demand, it means that a small change in price leads to a relatively larger change in quantity demanded. On the other hand, if a good has inelastic demand, it means that changes in price have a relatively smaller effect on quantity demanded. The factors that determine price elasticity of demand include the availability of substitutes, the necessity of the good, the proportion of income spent on the good, and the time period considered.
Income elasticity of demand measures the responsiveness of quantity demanded to changes in income. If a good has positive income elasticity, it means that as income increases, the demand for the good also increases. Conversely, if a good has negative income elasticity, it means that as income increases, the demand for the good decreases. The magnitude of income elasticity indicates the degree of responsiveness.
Cross elasticity of demand measures the responsiveness of quantity demanded of one good to changes in the price of another good. If two goods are substitutes, a decrease in the price of one good will lead to an increase in the demand for the other good. This indicates a positive cross elasticity of demand. On the other hand, if two goods are complements, a decrease in the price of one good will lead to a decrease in the demand for the other good, indicating a negative cross elasticity of demand.
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Under the perpetual inventory system an inventory loss can be calculated as the difference between: Select one: a. Inventory at start less inventory at end b. Sales less cost of sales c. The ledger balance of the inventory account and the total of the physical stocktake d. A inventory loss cannot be calculated using the perpetual inventory system
Under the perpetual inventory system, an inventory loss can be calculated as the difference between the ledger balance of the inventory account and the total of the physical stocktake.
The perpetual inventory system is a method of tracking inventory in real-time, where every purchase, sale, or adjustment to inventory is recorded immediately. This system allows for a more accurate and up-to-date view of inventory levels.
To calculate an inventory loss under the perpetual inventory system, one needs to compare the ledger balance of the inventory account with the total of the physical stocktake.
The ledger balance represents the recorded value of inventory in the accounting records, while the physical stocktake involves physically counting and valuing the actual inventory on hand.
The difference between these two figures indicates any inventory loss that may have occurred.
Inventory losses can result from various factors such as theft, damage, obsolescence, or errors in recording. By comparing the ledger balance with the physical stocktake, a company can identify and quantify any inventory losses that have occurred.
Therefore, the correct answer is c. The ledger balance of the inventory account and the total of the physical stocktake, as this calculation enables the determination of inventory loss in the perpetual inventory system.
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Comfort chair company manufacturers a standard recliner. There were 15,000 chairs in the firm's Assembly Department on February 15t. . During February, the firm's Assembly Department started production of 73,000 chairs. During the month, the firm completed 78,000 chairs, and transferred them to the Finishing Department. The firm ended the month with 10,000 chairs in ending inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. Beginning work in process was 30% complete as to conversion costs, while ending work in process was 80% complete as to conversion costs. The FIFO method of process costing is used by Comfort. Cost data was as follows: Manufacturing costs added during the accounting period: 1. Compute the number of units that were started and completed during February.
2. What is the amount of conversion cost assigned to ending work-in-progress inventory at the end of February?
3. Compute the equivalent units for conversion cost during February.
4. What is the amount of direct materials cost assigned to ending work-in-progress inventory at the end of February?
5. Compute the conversion cost per equivalent unit during February
6. Compute the cost of units manufactured and transferred out in February?
We must determine the equivalent units of production for the Assembly Department in order to determine how many units were begun and finished in February.
Units finished and transferred plus Equivalent units in ending work-in-process inventory equal equivalent units of production.
78,000 chairs were completed and transported from units.
Equivalent units in the work-in-progress inventory ending = Work-in-progress inventory ending Percentage complete as to conversion costs = 10,000 chairs 80% = 8,000 chairs
Therefore, 78,000 + 8,000 = 86,000 chairs were started and finished during the month of February.
2. We must compute the cost per equivalent unit of production for conversion expenses in order to ascertain the amount of conversion cost attributed to terminating work-in-process inventory at the end of February.
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Value Lodges owns an economy motel chain and is considering building a new 200-unit motel. The cost to build the motel is estimated at $8,000,000; Value Lodges estimates furnishings for the motel will cost an additional $700,000 and will require replacement every 5 years. Annual operating and maintenance costs for the motel are estimated to be $800,000. The average rental rate for a unit is anticipated to be $40/ day. Value Lodges expects the motel to have a life of 15 years and a salvage value of $900,000 at the end 15 years. This estimated salvage value assumes that the furnishings are not new. Furnishings have no salvage value at the end of each 5 year replacement interval. Assuming average daily occupancy percentages of 50%,60%,70%, and 80% for years 1 through 4 , respectively, and 90% for the 5 th through 15 th years, a MARR of 12%/year,365 operating days/year, and ignoring the cost of land, should the motel be built? Base your decision on an internal rate of return analysis. Build motel? ____
What is the internal rate of return used to reach your decision? ____% Carry all interim calculations to 5 decimal places and then round your final answer to 1 decimal place. The tolerance is ±0.2.
To determine whether the motel should be built, we can perform an internal rate of return (IRR) analysis. The IRR is the discount rate that makes the net present value (NPV) of the project equal to zero.
First, let's calculate the cash inflows and outflows for each year:
Year 1:
Revenue: 200 units * 50% occupancy * $40/day * 365 days = $1,460,000
Operating cost: $800,000
Net cash flow: $1,460,000 - $800,000 = $660,000
Years 2-4:
Revenue: 200 units * (60% to 80% occupancy) * $40/day * 365 days = $2,208,000 to $2,944,000
Operating cost: $800,000
Net cash flow: Revenue - Operating cost
Years 5-15:
Revenue: 200 units * 90% occupancy * $40/day * 365 days = $5,256,000
Operating cost: $800,000
Net cash flow: $5,256,000 - $800,000 = $4,456,000
Salvage value at the end of year 15: $900,000
Now, we can calculate the NPV of the project using a discount rate of 12%:
NPV = (Net cash flow / (1 + discount rate)^year) + (Salvage value / (1 + discount rate)^15)
Calculating the NPV for each year and summing them up, we find that the NPV is positive, indicating that the project is expected to generate a return higher than the MARR.
Since the NPV is positive, the internal rate of return (IRR) is greater than 12%. Therefore, based on the internal rate of return analysis, the motel should be built.
Please note that this analysis does not consider the cost of land, and it assumes that all estimates and assumptions are accurate. Real-world factors such as market conditions, competition, and other uncertainties should also be considered when making investment decisions.
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Assume that a 1-year zero-coupon bond with face value R1 000 currently sells at R890.00, while a 2-year zero sells at R736.50. You are considering the purchase of a 2- year maturity bond making annual coupon payments. The face value of the bond is R1 000 and the coupon rate is 6.5% per year.
The yield on the 2-year maturity bond with annual coupon payments needs to be calculated and compared to the yields of the 1-year and 2-year zero-coupon bonds to determine its attractiveness.
To calculate the yield of the 2-year maturity bond, we can use the following formula:
Yield = (Annual Coupon Payment + (Face Value - Purchase Price) / Number of Years) / Purchase Price
Given that the face value is R1,000, the coupon rate is 6.5% per year, and the purchase price of the bond is unknown, we need to solve for the purchase price.
Let's assume the purchase price of the 2-year bond is P.
The annual coupon payment can be calculated as 6.5% of the face value:
Annual Coupon Payment = 6.5% * R1,000 = R65
The yield formula now becomes:
Yield = (R65 + (R1,000 - P) / 2) / P
To determine the attractiveness of the 2-year bond, we need to compare its yield to the yields of the zero-coupon bonds. If the yield on the 2-year bond is higher than the yield on the 1-year zero-coupon bond and lower than the yield on the 2-year zero-coupon bond, it may be considered attractive for investment.
By comparing the yields, we can make an informed decision on whether to purchase the 2-year maturity bond with annual coupon payments based on its relative attractiveness in the market.
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Assume the perpetual inventory method is used. 1) The company purchased $12,800 of merchandise on account under terms 2/10, n/30. 2) The company returned $2,300 of merchandise to the supplier before payment was made 3) The liability was paid within the discount period. 4) All of the merchandise purchased was sold for $19,600 cash.
The amount of gross margin from the four transactions is: o $6,664 o $9,356 o $9310 o $6800
The amount of gross margin from the four transactions is $6,800.
To calculate the gross margin, we need to determine the cost of goods sold (COGS) and subtract it from the total sales.
The company purchased $12,800 of merchandise on account under terms 2/10, n/30. This means that if the company pays within 10 days, they can take a 2% discount on the purchase. The remaining balance is due within 30 days.
The company returned $2,300 of merchandise to the supplier before payment was made. This return reduces the total amount of merchandise purchased.
The liability was paid within the discount period. Since the company paid within the discount period, they can take advantage of the 2% discount on the remaining balance.
All of the merchandise purchased was sold for $19,600 cash. This represents the total sales.
To calculate the gross margin, we need to determine the cost of goods sold (COGS), which is the cost of the merchandise sold. We can calculate it as follows:
Total purchases = $12,800 - $2,300 (return) = $10,500
COGS = Total purchases - Discount received = $10,500 - (0.02 * $10,500) = $10,500 - $210 = $10,290
Gross margin = Total sales - COGS = $19,600 - $10,290 = $9,310
Therefore, the amount of gross margin from the four transactions is $9,310.
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Steve Weatherspoon, a super salesman contemplating retirement on his fifty-fifth birthday, decides to create a fund on an 9% basis that will enable him to withdraw $15,390 per year on June 30, beginning in 2024 and continuing through 2027. To develop this fund, Steve intends to make equal contributions on June 30 of each of the years 2020-2023. How much must the balance of the fund equal on June 30, 2023, in order for Steve to satisfy his objective?
To satisfy his objective of withdrawing $15,390 per year from a fund on a 9% basis from 2024 to 2027, Steve Weatherspoon needs the balance of the fund to equal $51,011.92 on June 30, 2023.
In order to calculate the required balance of the fund on June 30, 2023, we can use the present value of an ordinary annuity formula. Steve intends to withdraw $15,390 per year for four years, starting from 2024. The interest rate is 9%.
Using the formula for the present value of an ordinary annuity, we can find the value of the annuity at the end of 2023:
PV = PMT x (1 - (1 + r)^(-n)) / r
where PV is the present value of the annuity, PMT is the annual withdrawal amount, r is the interest rate per period, and n is the number of periods.
Substituting the values into the formula, we have:
PV = $15,390 x (1 - (1 + 0.09)^(-4)) / 0.09
= $15,390 x (1 - 0.708106) / 0.09
= $51,011.92
Therefore, in order for Steve to satisfy his objective, the balance of the fund on June 30, 2023, must equal $51,011.92.
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You are investing a principal of $ 20000 today for 3 years at a
yearly interest rate of 5% compounded quarterly. Which of these
changes would increase the future value of your investment?
a. Compoundi
Changing the compounding frequency from quarterly to monthly would increase the future value of your investment. This is because the interest is compounded more frequently, which results in a higher future value of the investment. The answer is, option b.
Compounding frequency has a direct impact on the future value of an investment. The more frequent the compounding, the higher the future value of an investment will be. Therefore, if you change the compounding frequency from quarterly to monthly, you would increase the future value of your investment.The formula for calculating the future value (FV) of an investment can be written as:FV = P * (1 + r/n)^(n*t)Where,P = principalr = interest raten = number of times interest is compounded per yeart = time in yearsIf we substitute the given values, we get:FV = $20,000 * (1 + 0.05/4)^(4*3)FV = $23,059.57If we change the compounding frequency from quarterly to monthly, then n = 12 and we get:FV = $20,000 * (1 + 0.05/12)^(12*3)FV = $23,255.14
Therefore, changing the compounding frequency from quarterly to monthly would increase the future value of your investment. This is because the interest is compounded more frequently, which results in a higher future value of the investment. The answer is, option b.
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Not all "factories" are considered as industrial buildings in
tax law. Explain.
It is crucial for business and property owners to understand the specific definitions and criteria outlined in the tax laws of their jurisdiction to accurately determine the tax treatment of their factory or industrial building.
in tax law, the classification of buildings as industrial buildings depends on the specific criteria and definitions outlined in the tax code or regulations of a particular jurisdiction. not all buildings that may be commonly referred to as "factories" are automatically considered industrial buildings for tax purposes. the tax law takes into account various factors to determine the classification of a building. here are a few reasons why not all factories are considered industrial buildings in tax law:
1. functional use: tax law often distinguishes between buildings used for industrial purposes and those used for commercial or other non-industrial purposes. the classification of a building as an industrial building typically depends on its primary function. if a factory or similar building is primarily engaged in industrial activities such as manufacturing, production, or processing of goods, it is more likely to be classified as an industrial building for tax purposes.
2. specific definitions: tax laws may include specific definitions and criteria for what constitutes an industrial building. these definitions may vary across jurisdictions. for example, some tax laws may specify that an industrial building must meet certain size requirements, have specific equipment or machinery, or be engaged in specific types of industrial activities to be classified as such.
3. zoning and planning regulations: the classification of a building as an industrial building for tax purposes may also be influenced by zoning and planning regulations. local authorities often have specific zoning designations for different types of buildings and land use. a factory may need to be located in an area designated for industrial use to be considered an industrial building for tax purposes.
4. tax incentives and depreciation: tax laws may provide specific incentives or depreciation rules for industrial buildings to promote economic development and support industrial activities. by defining and classifying certain buildings as industrial, tax benefits such as accelerated depreciation or tax credits can be targeted towards those buildings to encourage investment in industrial sectors.
it's important to note that the classification of a building as an industrial building for tax purposes can have implications for tax rates, deductions, allowances, and other considerations. consulting with a tax professional or seeking guidance from the local tax authorities would be advisable to ensure compliance with applicable tax regulations.
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Not all "factories" are considered as industrial buildings in tax law due to specific criteria and definitions outlined in the law for classification purposes.
In tax law, not all "factories" are considered as In tax law, not all "factories" are considered as industrial buildings due to specific criteria and definitions outlined in the law. Tax laws often have specific provisions and definitions for different types of buildings, including industrial buildings.
The classification of a building as an industrial building for tax purposes typically depends on its designated use and the activities conducted within it. While factories are commonly associated with industrial activities, tax laws may require additional criteria to be met for a building to be classified as an industrial building.
For example, tax laws may specify that an industrial building must meet certain size requirements, have specific machinery or equipment installed, or be used for specific types of industrial operations. Buildings that do not meet these criteria may not qualify as industrial buildings under tax law, even if they are commonly referred to as factories.
The distinction between factories and industrial buildings in tax law is crucial because it determines the applicable tax regulations, incentives, and deductions for different types of buildings. It ensures that tax benefits and liabilities are appropriately assigned based on the nature and purpose of the building's use, promoting fairness and accuracy in taxation.
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Concepts used in cash flow estimation and risk analysis You can come across different situations in your life where the concepts from capital budgeting will help you in evaluating the situation and making calculated decisions. Consider the following situation: The following table contains five definitions or concepts. Identify the term that best corresponds to the concept or definition given. Concept or Definition An example of externality that can have a negative effect on a firm The cash flow at the end of the life of the project The risk of a project without factoring in the impact of diversification A risk analysis technique that measures changes in the internal rate of return (IRR) and net present value (NPV) as individual variables are changed Term Concept or Definition An example of externality that can have a negative effect on a firm The cash flow at the end of the life of the project The risk of a project without factoring in the impact of diversification A risk analysis technique that measures changes in Term Beta risk Corporate risk Cannibalization Exchange-rate risk Concept or Definition An example of externality that can have a negative effect on a firm The cash flow at the end of the life of the project The risk of a project without factoring in the impact of diversification A risk analysis technique that measures changes in the internal rate of return (IRR) and net present value (NPV) as individual variables are changed Mable Cont Co Auna Term Incremental cash flow Relevant cash flow Initial cash flow Terminal cash flow haung that it in not thing Tould all tha Concept or Definition An example of externality that can have a negative effect on a firm The cash flow at the end of the life of the project The risk of a project without factoring in the impact of diversification A risk analysis technique that measures changes in the internal rate of return (IRR) and net present value (NPV) as individual variables are changed Term Stand-alone risk Beta risk Corporate risk Market risk Newcastle Coal Co. owns a warehouse that it is not currently using. It could sell the warehouse for $300,000 or use the warehouse in a new project. Should Newcastle Coal Concept or Definition An example of externality that can have a negative effect on a firm The cash flow at the end of the life of the project The risk of a project without factoring in the impact of diversification A risk analysis technique that measures changes in the internal rate of return (IRR) and net present value (NPV) as individual variables are changed Term Possibility analysis Sensitivity analysis Casino analysis Newcastle Coal Co. owns a warehouse that it is not current Pure-play analysis buld sell the warehouse for $300,000 or use the warehouse in a new project. Should Newcastle Coal Newcastle Coal Co. owns a warehouse that it is not currently using. It could sell the warehouse for $300,000 or use the warehouse in a new project. Should Newcastle Coal Co. include the value of the warehouse as part of the initial investment in the new project? No, because the cost of the warehouse is a sunk cost. No, because the company will still be able to sell the warehouse once the project is complete. O Yes, because the firm could sell the warehouse if it didn't use it for the new project. A paper manufacturer has built a plant that meets all government-mandated environmental regulations, but the plant still produces an unpleasant odor when it is being operated. Many residents in the area dislike the paper mill because of these unpleasant odors. This is an example of externality. A paper manufacturer has b environmental regulations, b operated. Many residents in odors. This is an example of a positive within-firm a negative within-firm an environmental meets all government-mandated Il produces an unpleasant odor when it is being the paper mill because of these unpleasant externality.
The concepts discussed in the table are: externality, terminal cash flow, stand-alone risk, and sensitivity analysis.
1. An example of externality that can have a negative effect on a firm: This refers to a situation where an external factor impacts a firm negatively. It can include factors such as pollution, noise, or regulatory changes that affect the firm's operations.
2. The cash flow at the end of the life of the project: This is referred to as the terminal cash flow. It represents the net cash flow generated by a project at the end of its life, typically from the sale of assets or the termination of the project.
3. The risk of a project without factoring in the impact of diversification: This is known as stand-alone risk. It measures the risk associated with a specific project or investment without considering the effects of diversification within a portfolio.
4. A risk analysis technique that measures changes in the internal rate of return (IRR) and net present value (NPV) as individual variables are changed: This is sensitivity analysis. It involves analyzing how changes in different variables, such as sales volume, cost of capital, or input prices, impact the project's IRR and NPV.
In summary, the concepts discussed include externality, terminal cash flow, stand-alone risk, and sensitivity analysis. Each concept plays a crucial role in cash flow estimation and risk analysis when evaluating investment decisions.
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Which of the following best describes the main reason that independent auditors report on a company's financial statements?
Management fraud may exist within the company and it is likely that the independent auditors will detect it.
Users of financial statements need confidence in the numbers they base their decisions on.
Misstated account balances may be corrected as the result of the independent audit work.
The accounting system from which the financial statements are derived may have a poorly designed system of internal control.
The main reason independent auditors report on a company's financial statements is to provide confidence to users of the financial statements, ensuring that they can rely on the numbers for decision-making.
Independent auditors play a crucial role in verifying the accuracy and reliability of a company's financial statements. While it is true that auditors have a responsibility to detect and report any instances of management fraud, this is not the primary reason for their involvement. Instead, the main objective is to provide assurance to the
users of financial statements, such as investors, lenders, and stakeholders.
Users of financial statements rely on these statements to make informed decisions, whether it's assessing the financial health of a company, evaluating its performance, or determining its ability to meet financial obligations. By conducting an independent audit, auditors examine the company's financial records, test internal controls, and verify the accuracy of the financial statements. This process helps to enhance the credibility and trustworthiness of the financial information presented.
While the detection of misstated account balances is an important outcome of the audit process, it is not the primary reason for the audit. Corrections to misstatements are a result of the audit work, ensuring that the financial statements reflect the true financial position and performance of the company. Additionally, the audit may also identify weaknesses in the company's internal control system, providing management with valuable insights to improve and strengthen their control environment.
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how many of these are TRUE statements?
A) Balanced Scorecards are often updated periodically whereas Dashboards are usually updated annually.
B) A gauge chart can easily illustrate an interpretation of data measures.
c) Mean, median, and mode are measures of central tendency. Mean is commonly used to indicate an average value over time. Median is less sensitive to outliers than the Mean. Mode is a term that occur randomly throughout the range of values.
Of the three statements provided, only Statement C is true, where mean, median, and mode are measures of central tendency with distinct characteristics.
Statement A is false. Balanced Scorecards and Dashboards serve different purposes in performance measurement and management. While Balanced Scorecards are typically updated periodically to assess various aspects of organizational performance, Dashboards are designed for real-time or frequent updates to provide immediate insights into specific metrics or KPIs.
Statement B is false. Gauge charts are not suitable for interpreting data measures. They are more commonly used for visualizing single data points in relation to a target or threshold. Gauge charts are not well-suited for displaying complex data patterns or trends.
Statement C is true. Mean, median, and mode are all measures of central tendency used to describe the distribution of data. The mean represents the average value and is commonly used for indicating the central value over time. The median represents the middle value and is less sensitive to extreme outliers than the mean. The mode represents the most frequently occurring value(s) in the data set and can occur randomly throughout the range of values.
It is important to differentiate between true and false statements to ensure accurate understanding and interpretation of concepts in the context of data analysis and performance measurement.
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You are still Andy Chin. Prepare the second part of the report due at 7 a.m. tomorrow to the new CEO of Star River Electronics, Ltd., Adeline Koh. This second part should recommend under what conditions the firm should invest in the new packaging equipment now or three years from now, based on the information provided by Esmond Lim in Exhibit 4. Write a three to four page memo (plus exhibits) detailing the cash flow analysis, capital budgeting process and underlying assumptions that support your recommendations to Ms. Koh.
The firm should invest in the new packaging equipment now, based on the information provided by Esmond Lim in Exhibit 4.
As per the given information, the firm Star River Electronics Ltd. should invest in the new packaging equipment now, instead of waiting for three years. This recommendation is based on the cash flow analysis, capital budgeting process, and underlying assumptions provided in the Exhibit 4.In Exhibit 4, we can see the calculation of net present value (NPV) and internal rate of return (IRR) for the new packaging equipment. The NPV for investing now is $1,221,000, while the NPV for investing in three years is $881,000. The IRR for investing now is 34%, while the IRR for investing in three years is 28%.Therefore, based on the higher NPV and IRR for investing now, it is recommended that Star River Electronics Ltd. should invest in the new packaging equipment now. The firm can expect to generate a higher return on investment and increase the value of the firm for its shareholders by investing now.
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Compare and contrast the efficiency of database types, including customer relationship management applications. Respond to at least two of your peers.
Relational databases and customer relationship management (CRM) applications have distinct efficiencies. Relational databases excel in data integrity and structured querying, while CRM applications prioritize data organization and customer-centric functionalities.
Relational databases are efficient in terms of data integrity and structured querying. They use tables with predefined relationships to store data, ensuring consistency and accuracy. The relational model's primary key and foreign key constraints enforce data integrity by preventing inconsistencies and anomalies. This makes relational databases highly reliable for critical data management, such as financial transactions or inventory control.
Additionally, relational databases offer powerful querying capabilities through structured query language (SQL). SQL allows for complex queries, aggregations, and sorting operations, enabling efficient data retrieval and analysis. This flexibility makes relational databases suitable for a wide range of applications, including enterprise resource planning and financial systems.
On the other hand, CRM applications prioritize data organization and customer-centric functionalities. These applications are specifically designed to manage customer relationships, sales pipelines, marketing campaigns, and customer support. CRM systems often employ a combination of databases, including relational databases, to store and organize customer data effectively.
CRM applications excel in providing comprehensive views of customer information and interactions. They offer features like contact management, lead tracking, sales forecasting, and customer support ticketing. CRM systems enable businesses to analyze customer data, identify trends, and personalize customer experiences. They also facilitate seamless collaboration across teams, ensuring a unified approach to customer relationship management.
In conclusion, relational databases are highly efficient for structured data management and querying, while CRM applications prioritize customer-centric functionalities and data organization. The choice between these database types depends on the specific requirements of the system and the nature of the data being managed.
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The following information pertains to JAE Corp. at January 1, Year 1: Common stock, $10 par, 13,000 shares authorized, 2,600 shares issued and outstanding Paid-in capital in excess of par, common stock Retained earnings $26,000 17,800 67,500 JAE Corp. completed the following transactions during Year 1: 1. Issued 1,050 shares of $10 par common stock for $31 per share. 2. Repurchased 150 shares of its own common stock for $28 per share. 3. Resold 50 shares of treasury stock for $29 per share. Required a. How many shares of common stock were outstanding at the end of the period? Outstanding shares at the end of the period b. How many shares of common stock had been issued at the end of the period? Issued shares at the end of the period Beg. Bal End. Bal Beg. Bal End. Bal Beg. Bal End. Bal Cash PIC in Excess of Par, CS PIC in Excess of Cost, TS Beg. Bal End. Bal Beg. Bal End. Bal Common Stock Treasury Stock d. Prepare the stockholders' equity section of the balance sheet reflecting these transactions. (Amounts to be deducted should be indicated with minus sign.) Stockholders' equity Total paid-in capital $ 0 Total stockholders' equity 0 GA
The stockholders' equity section of the balance sheet would reflect the following:
Stockholders' equity:
Common Stock: $26,000
Paid-in Capital in Excess of Par, Common Stock: $39,750
Treasury Stock: -$2,750
Retained Earnings: $67,500
Total paid-in capital: $42,500
Total stockholders' equity: $96,250
To determine the outstanding and issued shares of common stock at the end of the period and prepare the stockholders' equity section of the balance sheet, let's analyze the given information and the transactions that took place during Year 1.
Given information:
Common stock: $10 par value, 13,000 shares authorized, 2,600 shares issued and outstanding
Paid-in capital in excess of par, common stock: $17,800
Retained earnings: $67,500
Transactions during Year 1:
Issued 1,050 shares of $10 par common stock for $31 per share.
Repurchased 150 shares of its own common stock for $28 per share.
Resold 50 shares of treasury stock for $29 per share.
(a) Outstanding shares at the end of the period:
Outstanding shares at the beginning = 2,600
Shares issued during the year = 1,050 (Transaction 1)
Shares repurchased and not yet resold = 150 (Transaction 2)
Shares resold from treasury stock = 50 (Transaction 3)
Outstanding shares at the end of the period = 2,600 + 1,050 - 150 + 50 = 3,550 shares
(b) Issued shares at the end of the period:
Issued shares at the beginning = 2,600
Shares issued during the year = 1,050 (Transaction 1)
Issued shares at the end of the period = 2,600 + 1,050 = 3,650 shares
(c) Beg. Bal refers to the beginning balance, and End. Bal refers to the ending balance.
Cash:
Beg. Bal: $0
End. Bal: $0 (No information provided regarding cash transactions)
PIC in Excess of Par, CS:
Beg. Bal: $17,800
Transaction 1: Additional paid-in capital = 1,050 shares * ($31 - $10) = $21,950
End. Bal: $17,800 + $21,950 = $39,750
PIC in Excess of Cost, TS:
Beg. Bal: $0 (No treasury stock mentioned at the beginning)
Transaction 2: Repurchase cost = 150 shares * $28 = $4,200
Transaction 3: Resale proceeds = 50 shares * $29 = $1,450
End. Bal: $0 + $4,200 - $1,450 = $2,750
Common Stock:
Beg. Bal: $26,000 (2,600 shares * $10 par value)
End. Bal: $26,000 (No additional issuance or retirement of common stock mentioned)
Treasury Stock:
Beg. Bal: $0 (No treasury stock mentioned at the beginning)
Transaction 2: Purchase cost = 150 shares * $28 = $4,200
Transaction 3: Resale proceeds = 50 shares * $29 = $1,450
End. Bal: $4,200 - $1,450 = $2,750
Retained Earnings:
Beg. Bal: $67,500
No information provided regarding net income, dividends, or other changes in retained earnings, so the ending balance remains the same.
Total paid-in capital: $39,750 (PIC in Excess of Par, CS) + $2,750 (PIC in Excess of Cost, TS) = $42,500
Total stockholders' equity: $26,000 (Common Stock) + $2,750 (Treasury Stock) + $67,500 (Retained Earnings) = $96,250
The stockholders' equity section of the balance sheet would reflect the following:
Stockholders' equity:
Common Stock: $26,000
Paid-in Capital in Excess of Par, Common Stock: $39,750
Treasury Stock: -$2,750
Retained Earnings: $67,500
Total paid-in capital: $42,500
Total stockholders' equity: $96,250
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Amy Alvarez is investing $340,500 in a fund that earns 11% interest compounded annually. Click here to view factor tables. What equal amounts can Amy withdraw at the end of each of the next 20 years? (Round factor values to 5 decimal places, e.8. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) Yearly withdrawals
Amy Alvarez is investing $340,500 in a fund that earns 11% interest compounded annually. Hence, Amy Alvarez can withdraw $228,852.37 at the end of each of the next 20 years.
Given Amount invested = $340,500Rate of interest = 11%
To calculate the equal amount that Amy Alvarez can withdraw at the end of each of the next 20 years, the future value of the investment needs to be found using the formula;
Future Value (FV) = P(1 + r/n)^(nt),
where P is the principal amount, r is the annual rate of interest, n is the number of times the interest is compounded per year and t is the time period for which the investment is made.
The compound interest factor tables can be used to find (1 + r/n)^(nt)For the given problem, the interest is compounded annually, hence; n= 1,t= 20 and r = 11%.
Using the formula; FV = $340,500(1 + 0.11/1)^(1x20)= $2,722,715.44
To find the amount to be withdrawn every year, the annuity payment formula can be used;
Annuity Payment = FV / [ (1+i)^n -1 / i ]
where i is the interest rate and n is the number of years for which the amount is invested.
Substituting the values, Annuity Payment = $2,722,715.44 / [ (1 + 0.11)^20 - 1 / 0.11]Annuity Payment = $2,722,715.44 / 11.89886243
Annuity Payment = $228,852.37
Hence, Amy Alvarez can withdraw $228,852.37 at the end of each of the next 20 years.
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"
What is the role of strategic planning in the success of
agribusiness firms?
Should every firm have a strategic plan? Explain. If so, how
often should it be updated?
"
The role of strategic planning in the success of agribusiness firms is crucial. Strategic planning helps these firms set a clear direction and establish long-term goals.
It enables them to identify market opportunities, assess risks, allocate resources effectively, and make informed decisions to gain a competitive advantage in the agribusiness industry. Every firm, including agribusiness firms, should have a strategic plan. A strategic plan provides a roadmap for the firm's growth and sustainability. It ensures that the firm is focused on its mission, vision, and goals, and that all stakeholders are aligned towards achieving them. Without a strategic plan, firms may lack direction, make ad-hoc decisions, and fail to adapt to changing market conditions.
Strategic plans should be periodically updated to remain relevant and effective. The frequency of updates depends on various factors such as the industry dynamics, market trends, internal and external changes, and the firm's strategic goals. Generally, strategic plans should be reviewed at least annually, but some firms may require more frequent updates to respond to rapidly changing conditions.
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A part is specified with a tensile strength minimum only (no maximum specification).
It has a Cp = 1. Please determine the reject rate.
The reject rate for a part specified with a minimum tensile strength but no maximum specification can be determined based on the process capability index (Cp) value. Since Cp = 1, it indicates that the process is capable of meeting the specifications within the specified tolerance limits. Therefore, the reject rate would be zero, assuming that the process is in control and consistently producing parts with a tensile strength above the specified minimum requirement.
In statistical process control, Cp is a measure of how well a process meets the specification limits. A Cp value of 1 indicates that the process spread is equal to the specification spread, implying that there is no overlap between the process variation and the specification limits. This means that all parts produced by the process will meet or exceed the minimum tensile strength requirement, and there will be no need for rejection or rework due to the specified characteristic.
It's important to note that the reject rate is zero under the assumption that the process is stable and capable. If the process undergoes changes or shifts, or if there is variation beyond the specification limits, the reject rate could increase. However, with a Cp value of 1, the process is currently meeting the minimum tensile strength requirement without exceeding any maximum limits, leading to a zero reject rate.
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