Using variable costing and the contribution approach for internal decision-making enables CVP (Cost-Volume-Profit) analysis. It supports decision-making by providing information about the contribution margin of each product or service, which is the amount left over after variable costs have been subtracted from sales revenue.
This information can be used to determine the breakeven point, the level of sales required to cover all fixed costs and to assess the profitability of different products or services. While using these methods is not required as part of GAAP financial statements, they are valuable tools for internal decision-making.
These methods are not required as part of GAAP (Generally Accepted Accounting Principles) financial statements. GAAP requires that companies use absorption costing, which includes fixed manufacturing overhead as part of the cost of goods sold.
Variable costing and the contribution approach focus on separating fixed and variable costs, which is useful for decision-making and CVP analysis. However, these methods may not provide the same level of accuracy for financial reporting purposes as absorption costing, which reflects all costs incurred in the production of goods.
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which of the following statements is true of convenience goods? group of answer choices they are products that are bought by habit and lend themselves to self-service. they are usually high-priced items that are purchased infrequently. they are goods with trade names that are recognized for the exclusive nature of their clientele. they are products that target customers for specific seasons or events.
The true statement of convenience goods is they are products that are bought by habit and lend themselves to self-service. Option A is correct.
Convenience goods are products that are frequently purchased and are relatively low in price. These goods are usually staples or routine items that customers buy regularly, such as food, household items, personal care products, and other everyday items.
Convenience goods are bought by habit and lend themselves to self-service. Customers often do not spend much time comparing prices or evaluating the quality of the product, but rather rely on convenience and availability.
Therefore, option A is correct.
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Periodically, the general ledger department receives all of the following except
a. total increases to accounts receivable
b. total of all sales backorders
c. total of all sales
d. total decreases in inventory
The correct answer is b. total of all sales backorders. The general ledger department typically receives information related to the total increases to accounts receivable, total of all sales, and total decreases in inventory.
The general ledger department periodically receives all of the following except: b. total of all sales backorders. The general ledger department typically receives information related to total increases to accounts receivable (a), total of all sales (c), and total decreases in inventory (d). However, it does not typically receive information on the total of all sales backorders, as backorders are an operational issue that is managed by other departments, such as sales and inventory management. Backorders are typically managed by the sales or inventory departments, and their status may be communicated to the general ledger department as needed for accounting purposes.
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Objective E-2-2 23. John sold IRC $ 1245 property on July 1, 2019, for $18,000. He had purchased the property on January 2, 2014, for $12,000. John claimed depreciation as follows: 2014 2015. 2016. $1,000 $1,000 $1,000 2017 2018 2019 $1,000 $1,000 $500 23 What is the amount of IRC S 1245 gain? O a $5,500 b. $6.000 Oc. $6,500 od. $11,500
The amount of IRC § 1245 gain is $500.
To calculate the amount of IRC § 1245 gain, we need to determine the total amount of claimed depreciation for the property.
2014: $1,000
2015: $1,000
2016: $1,000
2017: $1,000
2018: $1,000
2019: $500
Total claimed depreciation = $5,500
Next, we need to calculate the adjusted basis of the property.
Adjusted basis = Purchase price + claimed depreciation
Adjusted basis = $12,000 + $5,500
Adjusted basis = $17,500
Finally, we can calculate the IRC § 1245 gain.
IRC § 1245 gain = Selling price - Adjusted basis
IRC § 1245 gain = $18,000 - $17,500
IRC § 1245 gain = $500
Therefore, the amount of IRC § 1245 gain is $500, which is option d. $11,500 is incorrect as it is the difference between the selling price and the original purchase price, without accounting for the claimed depreciation.
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All of the following are Period costs except a. Sales commissions b. office worker's salaries c. electricity used to run the manufacturing process d. advertising expense
All of the options listed are Period costs except for the electricity used to run the manufacturing process. Therefore, the correct option is c. electricity used to run the manufacturing process
Period costs are expenses that are not directly related to the production process but rather support the general operation of the business.
Product costs are expenses that are directly related to the production process and are included in the cost of goods sold.
Electricity used to run the manufacturing process is considered a product cost because it is directly related to the production process and is included in the cost of goods sold.
Sales commissions, office worker's salaries, and advertising expenses are all expenses incurred to support the general operation of the business and are not directly related to the production process.
In conclusion, all of the options listed are Period costs except for the electricity used to run the manufacturing process, which is a product cost. Period costs are expenses incurred to support the general operation of the business and are not included in the cost of goods sold.
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Current Attempt in Progress Under the most common accounting method in practice, when convertible bonds are converted into shares the market value of the bonds is recorded as common shares. O the face value of the bonds is recorded as common shares. O again or loss should be recognized. O the book value of the bonds and the related contributed surplus account are transferred to common shares.
Under the most common accounting method in practice, when convertible bonds are converted into shares, the book value of the bonds and the related contributed surplus account are transferred to common shares. This means that the bond liability is removed from the balance sheet, and common shares are recorded at the market value of the bonds at the time of conversion. No gain or loss is recognized in the conversion process.
For example, if a company issued $1 million of convertible bonds that were later converted into common shares when the market value of the bonds was $1.2 million, the company would record the following entries:
Record the conversion of the bonds:
Debit Bonds Payable - Convertible $1,000,000
Credit Contributed Surplus $200,000
Credit Common Shares $1,200,000
Remove the bond liability:
Debit Bonds Payable - Convertible $1,000,000
Credit Contributed Surplus $1,000,000
After the conversion, the company would have an additional $200,000 in contributed surplus, which represents the difference between the market value of the bonds and the face value of the bonds. The number of common shares outstanding would also increase by the number of shares that were issued upon conversion.
When convertible bonds are converted into shares, the most common accounting method is to transfer the book value of the bonds and the related contributed surplus account to common shares.
The most common accounting method in practice for the conversion of convertible bonds into shares is to transfer the book value of the bonds and the related contributed surplus account to common shares. This means that the total amount of the bonds and the related contributed surplus are added to the common shares account in the balance sheet.
When convertible bonds are converted into shares, no gain or loss is recognized. The reason for this is that the conversion feature was already included in the initial pricing of the bonds, so there is no new transaction to record.
Therefore, the correct statement is: The book value of the bonds and the related contributed surplus account are transferred to common shares.
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The Costanza Corporation purchased some equipment August 1, 2021 for $17,040 and expects to use it for 8 years at which time it can be sold for an estimated $1,200. How much depreciation expense would be recorded in the company’s 2021 financial statements?
The depreciation expense that would be recorded in the company's 2021 financial statements is $2,055.
How to calculate the depreciation expense?To calculate the depreciation expense for 2021, we need to determine the depreciation method and the useful life of the equipment. Assuming the Costanza Corporation uses the straight-line depreciation method and the equipment has no salvage value, the annual depreciation expense would be:
Depreciation expense = (Cost of equipment - Salvage value) / Useful life
Cost of equipment = $17,040
Salvage value = $1,200
Useful life = 8 years
Depreciation expense = ($17,040 - $1,200) / 8 = $2,055
Therefore, the depreciation expense that would be recorded in the company's 2021 financial statements is $2,055.
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Enforcement in a timely manner is the_____ and most critical step in the development of an ethics code program
Enforcement in a timely manner is the final and most critical step in the development of an ethics code program.
Developing an ethics code program is an important step for any organization looking to promote ethical behavior and prevent unethical conduct. Such a program typically includes the development of a code of conduct or code of ethics that outlines the ethical principles and values that the organization expects its employees to uphold.
While developing a code of conduct is important, it is equally important to ensure that the code is effectively communicated to all employees and that there are mechanisms in place to enforce the code. Enforcement in a timely manner is the final and most critical step in the development of an ethics code program.
Enforcement mechanisms can include training programs, internal audits, reporting mechanisms, and disciplinary procedures. The goal of these mechanisms is to encourage employees to report any ethical violations or concerns, and to ensure that appropriate action is taken when violations are discovered. By enforcing the ethics code program in a timely and consistent manner, organizations can promote a culture of ethical behavior and minimize the risk of unethical conduct.
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The City maintains its books and records in a manner that facilitates the preparation of the financial statements of the fund. The city maintains a general fund, a capital projects fund, and a special revenues fund.
After studying the transactions in which the city participated, record each of these based on:
a) the fund financial statement and identifies the fund into which the entry is made, and
b) in governmental activities (goverment-wide financial statements)
6. During the year city employees earned $10 million in wages. At the end of the year, employees had been paid all but $1 million.
7. During the year, the city purchased $500,000 worth of materials and supplies.
8. The city paid $360,000 for a three-year insurance policy to cover some assets used in general government activities.
9. The city purchased four trucks for general government activities. The trucks cost $100,000 in total.
10. At the beginning of the year, the city leased some office equipment for use in the administrative offices. The lease qualified as a capital lease. The present value of the minimum lease payments is $96,000.
Fund Financial Statement Government-Wide financial Statement
Type of fund Type of fund
By providing all of the account balances in one location, trial balance aids in the preparation of financial statements. Audit committees keep an eye on the accuracy of financial data while directors create financial statements.
The annual report is subjected to various procedures by auditors, including an examination of the financial statements. Auditors provide the audit committee with a variety of reports. In addition to initiating, recording, processing, and reporting transactions (as well as events and conditions), management is responsible for establishing and maintaining internal control that will, among other things, be consistent with management's assertions embodied in the financial statements.
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a perfectly competitive industry has 100 high cost producers, each with a short run supply curve given by Qh=16p, and 100 low cost producers,each with a short run supply curve given by Ql=24p. The industry demand curve is given by Q^d=100,000-1000p. at market equilibrium, the industry producer surplus is?
To find the industry producer surplus at market equilibrium, we need to first find the equilibrium price and quantity.
Equating the industry demand and supply curves, we get:
100,000 - 1000p = 100(Qh + Ql)
Substituting Qh and Ql from their respective supply curves, we get:
100,000 - 1000p = 100(16p + 24p)
Simplifying and solving for p, we get:
p = $500
Substituting this value of p in the supply curves, we get:
Qh = 16p = 8000
Ql = 24p = 12000
Total industry quantity supplied = Qh + Ql = 20000
Total industry producer surplus = [(p - minimum supply price) * quantity supplied]/2
For high cost producers, minimum supply price = $62.50 (obtained by equating Qh = 0 in the supply curve)
For low cost producers, minimum supply price = $41.67 (obtained by equating Ql = 0 in the supply curve)
Therefore, the industry producer surplus is:
[(500 - 62.50) * 8000]/2 + [(500 - 41.67) * 12000]/2 = $4,854,165.67
Therefore, the industry producer surplus at market equilibrium is approximately $4,854,165.67.
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The main focus of a marketing information system is on
a) the coordination of external information sources.
b) classifying data into the proper information categories.
c) data storage and retrieval.
d) the accurate maintenance of inventory levels.
e) gathering information on competitive activity.
The main focus of a marketing information system is on gathering information on competitive activity, external information sources, and internal data, processing and analyzing it, and delivering the relevant information to decision-makers to support effective decision-making.
The main focus of a marketing information system is on gathering information from various internal and external sources, processing and analyzing it, and delivering the relevant information to decision-makers in a timely and accurate manner. While all the options mentioned are essential components of a marketing information system, the primary focus is on data collection, analysis, and dissemination.
The marketing information system helps organizations to keep track of changes in consumer behavior, preferences, and industry trends. It enables companies to identify and monitor their competition, measure the effectiveness of their marketing strategies, and make informed decisions based on insights gained from data analysis.
Classifying data into the proper information categories is an important step in the process, but it is not the primary focus. Similarly, accurate maintenance of inventory levels is crucial for organizations, but it is not the primary focus of a marketing information system.
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the puyer corporation makes and sells only one product called a deb. the company is in the process of preparing its selling and administrative expense budget for next year. the following budget data are available: monthly fixed cost variable cost per deb sold sales commissions $ 0.90 shipping $ 1.40 advertising $ 50,000 $ 0.20 executive salaries $ 60,000 depreciation on office equipment $ 20,000 other $ 40,000 all of these expenses (except depreciation) are paid in cash in the month they are incurred. if the company has budgeted to sell 17,000 debs in march, then the average budgeted selling and administrative expenses per unit sold for march is closest to: multiple choice $12.50 per unit $2.50 per unit $10.00 per unit $17.00 per unit
The average budgeted selling and administrative expenses per unit sold for March is $2.50.
How to calculate budgeted selling and administrative expenses per unit?The Puyer Corporation is preparing its selling and administrative expense budget for the next year. The company sells only one product called a "Deb". The given budget data includes monthly fixed costs and variable costs per Deb sold.
These expenses include sales commissions, shipping, advertising, executive salaries, and other expenses. All of these expenses, except for depreciation, are paid in cash in the month they are incurred. The company has budgeted to sell 17,000 Debs in March.
To determine the average budgeted selling and administrative expenses per unit sold for March, we need to calculate the total selling and administrative expenses for March and divide it by the number of Debs sold in March.
Therefore, the average budgeted selling and administrative expenses per unit sold for March would be $2.50 per unit.
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the cost of preferred stock, rps, used in the weighted average cost of capital equation is calculated as the preferred dividend, dps, divided by the current price of the preferred stock, pps. -select- tax adjustment is made when calculating rps because preferred dividends -select- tax deductible; so -select- tax savings are associated with preferred stock.
The first part of the statement is correct. The cost of preferred stock (rps) used in the weighted average cost of capital (WACC) equation is calculated as the preferred dividend (dps) divided by the current price of the preferred stock (pps).
However, the second part of the statement is incorrect. A tax adjustment is not made when calculating rps because preferred dividends are not tax-deductible. As a result, there are no tax savings associated with preferred stock.
Unlike interest payments on debt, preferred stock dividends are not tax-deductible for the issuing company.
This means that the cost of preferred stock is not adjusted for taxes in the same way that the cost of debt is adjusted for taxes. Therefore, the calculation for rps does not include any tax adjustments.
In summary, the cost of preferred stock is calculated as the preferred dividend divided by the current price of the preferred stock, and no tax adjustment is made because preferred dividends are not tax-deductible.
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One way to reduce international tensions is to foster global economic growth because:
Fostering global economic growth is a powerful means of reducing international tensions because it promotes cooperation and interdependence among nations.
When countries are economically interconnected, they have a shared interest in maintaining stable relationships and avoiding conflict. Trade and investment create mutual benefits that incentivize nations to work together and resolve disputes peacefully. Furthermore, economic growth can lead to greater opportunities for individuals and communities, reducing the likelihood of unrest and conflict caused by poverty and inequality. By promoting economic development and cooperation, nations can build relationships based on mutual interests and respect, ultimately reducing the likelihood of tensions and conflicts.
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If you decide to launch a viral marketing campaign, what should be the first question you address? O When should the press release be publishod? O Who should be selected as the initial seeds? O Should the campaign be funny or serious? O Which social media platform should be used the most?
If you decide to launch a viral marketing campaign, the first question you should address is Who should be selected as the initial seeds i.e. are your target audience?
Knowing your target audience will help determine the tone and messaging of the campaign. Once you have identified your target audience, you can then determine when the press release should be published, who should be selected as the initial seeds, and whether the campaign should be funny or serious. As for which social media platform to use the most, this will also depend on your target audience and where they are most active. It's important to do research and analyze which platforms will be most effective in reaching your target audience.
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blossom company issues $4.3 million, 10-year, 7% bonds at 96, with interest payable on december 31. the straight-line method is used to amortize bond discount.Prepare the journal entry to record interest expense and bond discount amortization on December 31, 2017, assuming no previous accrual of interest. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Blossom company issues $4.3 million, 10-year, 7% bonds at 96, with interest payable on December 31. The journal entry will debit the cash account and discount on balance payable while credit the cash account.
The journal entry on 1st January will be:
Cash A/c Dr. 42,57,000
Disc on bonds payable Dr. 43,000
To BP 4,300,000
The journal entry on Dec 31 will be:
Interest expense Dr. 305,300
To Discount on bonds payable 4,300
To Cash $301,000
Discount on bond payable = $4,300,000 - ($4,300,000 × 99/100)/10
= $4,3000
Cash = (4,30,000 × 7) / 100
= $301,000
Interest expense = discount on bonds payable + cash
= 4,300 + 301,000
= 305,300
A discount on bonds payable is noted when bonds are issued at a price lower than their face value. This discount is subsequently amortized during the life of the bond, typically utilizing straight line amortization, in which the amortization of the bond discount is equal for each period that the discount is amortized.
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For each of the independent situations described below select the appropriate inherent risk factor described and the effect (overstatement or understatement) of the inherent risk factor on the company’s net income using the following: Risk factors: Complexity Estimate Volume Industry Susceptibility to theft Situation Inherent Risk Factor Effect of Inherent Risk Factor on Company’s Net Income a. Sales orders for a textbook distributor have increased 100% over the last year. Additionally, the company’s inventory turnover has doubled since the previous year. b. Gold Miner, Inc. has gold mines in a number of states. To hedge the price of its gold inventory, Gold Miner purchases gold futures contracts. The fair value of gold has declined significantly in the last few months. c. Metal, Inc. supplies copper pipes to home builders. During year 1, copper prices doubled. At any given time, a significant amount of inventory is in transit or located at job sites. d. Joe’s Computers provides three-year money-back warranties on all laptops. During year 1, warranty claims decreased significantly and the company has not reduced the warranty reserve. e. Global Co. imports most of its products from a foreign supplier. During year 1, a new technology made part of the Global Co. inventory obsolete. ________________________________________
For each independent situation, I will identify the appropriate inherent risk factor and its effect on the company's net income:
a. Sales orders for a textbook distributor have increased 100% over the last year, and inventory turnover has doubled. The inherent risk factor here is Volume, and it may lead to an overstatement of the company's net income due to increased sales and inventory turnover.
b. Gold Miner, Inc. has gold mines in various states and uses gold futures contracts to hedge gold inventory prices. The fair value of gold has declined significantly recently. The inherent risk factor is Complexity, which may lead to an overstatement or understatement of net income depending on how the company values its gold inventory and hedges.
c. Metal, Inc. supplies copper pipes to home builders, and copper prices doubled during year 1. A significant amount of inventory is in transit or at job sites. The inherent risk factor is Industry, and it may lead to an overstatement of net income due to the increased value of copper inventory.
d. Joe's Computers offers three-year money-back warranties on laptops. Warranty claims decreased significantly during year 1, and the company hasn't reduced the warranty reserve. The inherent risk factor is Estimate, and it may lead to an overstatement of net income since the company hasn't reduced the warranty reserve despite decreased claims.
e. Global Co. imports products from a foreign supplier, and during year 1, new technology made part of its inventory obsolete. The inherent risk factor is Susceptibility to theft, and it may lead to an understatement of net income due to the obsolescence of inventory.
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Chrissy Corporation had the following securities outstanding at its fiscal year end December 31, 20X7: 1. 200,000 Options: $11 exercise price; each option allows for the purchase of one share + 2. Common Shares, no par; authorized 5,000,000 shares; issued and outstanding 600,000 shares 3. 7.5% Convertible Bonds, par value $2,500,000. The bonds were issued this year on May 1, 20x7. 4. Preferred Shares, cumulative, convertible, $1.25 dividend per quarter, no par. Authorization limit 100,000; issued and outstanding 25,000 shares. Issued this year on October 1, 20X7 Other Information for 20X7: a) Options were outstanding all year to purchase 200,000 common shares at $11 per share b) 20X7 net earnings were $790,000. c) Interest expense was $216,000 on the 6% bonds. d) The preferred shares are convertible into common shares at a rate of 9 common shares for 1 preferred share. e) The 7.5% convertible bonds are convertible at a rate of seven shares for each $100 bond. f) The tax rate is 359 g) Common shares traded for an average of $32 during the year. h) No dividends were declared in 20x7. U) No common shares were issued or retired during the year. NOTE: round all dollars to two decimal places. Round all share amounts to the nearest whole share NOTE: round all dollars to two decimal places. Round all share amounts to the nearest whole share Required: 1. Calculate basic EPS for the 2017 year. (4 marks) 2. Test each security for dilution and identify each as dilutive or anti-dilutive. If options are dilutive, show the calculation of new shares issued. SHOW ALL CALCULATIONS (9 marks) 3. Prepare a cascade worksheet to show the calculation of diluted EPS, beginning with basic EPS. (5 marks) I
The basic EPS for Chrissy Corporation for the year 2017 is $1.32 per share. The options are dilutive as the assumed proceeds of $2,200,000 from the exercise of the options at the average market price of $32 per share exceed the cost of repurchasing the common stock. The diluted EPS is the same as the basic EPS, which is $1.32 per share.
Basic EPS calculation:
Net earnings = $790,000
Weighted average of common shares outstanding = 600,000
Basic EPS = Net earnings / Weighted average of common shares outstanding
Basic EPS = $790,000 / 600,000 = $1.32
Dilution test:
Exercise price = $11
Average market price per share = $32
Options outstanding = 200,000
Options are anti-dilutive because the exercise price is higher than the average market price per share.
Convertible bonds:
Par value of bonds = $2,500,000
Interest rate = 7.5%
Interest expense = $216,000
Conversion rate = 7 shares per $100 bond
Number of shares convertible = (Par value of bonds / Conversion price per share) = ($2,500,000 / ($100 x 7)) = 35,714 shares
As the number of shares convertible is less than the potential dilutive effect of the bonds, they are anti-dilutive.
Preferred shares:
Dividend per share = $1.25 per quarter
Number of shares convertible = 25,000
Conversion rate = 9 common shares for 1 preferred share
Number of shares convertible = (Number of preferred shares x Conversion rate) = (25,000 x 9) = 225,000 shares
Dividend per share for preferred shares = $1.25 x 4 = $5 per year
Total potential dilution from preferred shares = (Dividend per share / Market price per share) x Number of shares convertible = ($5 / $32) x 225,000 = 35,156 shares
As the number of shares convertible is less than the potential dilutive effect of the preferred shares, they are anti-dilutive.
Cascade worksheet for diluted EPS:
Basic EPS = $1.32
Convertible bonds = 35,714 shares
Weighted average of common shares outstanding = 600,000
Potential dilution from convertible securities = 35,714 / (600,000 + 35,714) = 0.0563
Diluted EPS = (Net earnings - Preferred dividends) / (Weighted average of common shares outstanding + Conversion of convertible securities) = ($790,000 - $0) / (600,000 + (35,714 x 0.0563)) = $1.30.
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Theo Co. has the following items in transit as of December 31, 2022: $1879 of merchandise purchased FOB shipping point and $3725 of merchandise sold FOB destination The company would include $ in it's Inventory balance as of December 2022 related to these two in-transit items. Note: Enter 'O' if neither should be included in Inventory. Include whole numbers only in your answer. Do not include dollar signs, decimals, or commas.
Answer: $1879
Theo Co. would include $1879 in its Inventory balance as of December 2022 related to the in-transit items. This is because the merchandise purchased FOB shipping point is considered the buyer's inventory once it is shipped, while merchandise sold FOB destination remains the seller's inventory until it reaches the destination.
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The effect of a large stock dividend on the accounting equation includes ______. (Check all that apply.)***no effect on total stockholders' equitya decrease in total assetsa decrease in total stockholders' equity***a decrease in Retained Earnings***an increase in Common Stock
The effect of a large stock dividend on the accounting equation includes a decrease in Retained Earnings and an increase in Common Stock.
The effect of a large stock dividend on the accounting equation is as follows:
Common Stock: The issuance of additional shares of stock increases the company's Common Stock account. This reflects the additional ownership interest created by the distribution of new shares.
Retained Earnings: A large stock dividend reduces the company's Retained Earnings account. This is because the company is distributing a portion of its earnings to shareholders in the form of additional shares, rather than retaining them as earnings.
Total Equity: The net effect of a large stock dividend on the company's Total Equity depends on the relative magnitudes of the increases in Common Stock and decreases in Retained Earnings.
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The part of a risk statement that gives management insights into why the risk matters is calleda. risk assessmentb. risk identificationc. the outcomed. risk management
The part of a risk statement that gives management insights into why the risk matters is known as the outcome.
It is an essential component of a risk statement as it highlights the potential consequences of the risk event, which helps the management to prioritize and allocate resources to manage the risk.
The outcome section of the risk statement typically describes the impact of the risk event, such as financial loss, damage to reputation, or harm to the environment, among others.
It also provides insights into the likelihood of the risk event occurring and the potential severity of its impact.
This information enables the management to make informed decisions on how to manage the risk, whether to avoid, transfer, mitigate, or accept it.
A well-written outcome section of a risk statement helps the management to understand the significance of the risk event and its potential impact on the organization's objectives.
It also facilitates communication and collaboration between different departments and stakeholders, as they all understand the importance of managing the risk effectively.
This, in turn, enhances the organization's resilience and ability to navigate through uncertainties and challenges effectively.
In conclusion, the outcome section of a risk statement is a critical component that provides insights into the potential consequences of a risk event, enabling the management to make informed decisions on how to manage the risk effectively.
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suppose someone i stsudying a production possibilities fronterier that has a bowed out shape relative to the origin/ what causes this shape
A production possibilities frontier (PPF) is a graph that shows the maximum combination of goods that can be produced in an economy given its resources and technology. The bowed-out shape of a PPF is caused by the law of increasing opportunity cost.
This means that as an economy produces more of one good, the opportunity cost of producing additional units of that good increases. The law of increasing opportunity cost occurs because not all resources are equally suited to producing all goods. Some resources are better suited to producing one good over another.
As an economy produces more of one good, it must shift resources away from the production of other goods, which are less well-suited to those resources. The opportunity cost of producing additional units of the first good increases as resources that are less well-suited to its production are used.
The bowed-out shape of the PPF also reflects the principle of diminishing returns. As an economy produces more of one good, the marginal product of additional resources used in its production decreases. This means that more resources are required to produce additional units of the good, leading to a higher opportunity cost.
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AOL purchased Network.com for $1,200,000 cash. The fair market value of the assets purchased as determined by an appraiser was as follows. No liabilities were assumed. Equipment $400,000 Land 100,000 Building 400,000 Franchise 20,000 The goodwill associated with this purchase is? a. $280,000 b. $300,000 c. $1,200,000 d. $920,000 e. Cannot be determined
If AOL purchased Network.com for $1,200,000 cash then the goodwill associated with this purchase is $280,000. Option "a" is the correct answer.
Goodwill is calculated as the excess of the purchase price over the fair market value of the net assets acquired.
1. Determine the total fair market value of the identifiable assets: Equipment + Land + Building + Franchise.
2. Subtract the total fair market value from the purchase price.
Here's the calculation:
1. Total fair market value = $400,000 (Equipment) + $100,000 (Land) + $400,000 (Building) + $20,000 (Franchise) = $920,000
2. Goodwill = $1,200,000 (Purchase Price) - $920,000 (Total fair market value) = $280,000
The goodwill associated with this purchase is $280,000, so the correct answer is a. $280,000.
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consider whether or to what extent the fringe benefits listed below may be excluded from gross income and, where, possible, support your conclusions with statutory authority
The exclusion of fringe benefits from gross income depends on the specific nature of the benefit and the provisions of the tax code. Employers should consult with tax professionals to ensure compliance with applicable laws and regulations.
Some fringe benefits that may be excluded from gross income include health and accident insurance, education assistance programs, and transportation benefits such as parking and transit passes.
Under Section 105 of the Internal Revenue Code, employer-provided accident and health insurance benefits are generally excluded from gross income. Similarly, Section 127 of the code allows for exclusion of up to $5,250 per year for employer-provided education assistance programs.
Transportation fringe benefits, such as transit passes and qualified parking expenses, are also eligible for exclusion under Section 132 of the tax code. However, there are limits to the amount that can be excluded each year.
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8 It is usual to ask your previous employer for ..... when you apply for a job
When you apply for a job, it is usual to ask your previous employer for a reference, as this provides potential employers with an assessment of your work performance and skills.
It is usual to ask your previous employer for a reference when you apply for a job. A reference is a written or verbal statement about your previous work experience, skills, and abilities. It is important to have references because they can provide potential employers with valuable information about your work history and performance. When asking for a reference, be sure to choose someone who knows your work well and who can speak positively about your skills and abilities. It is also important to ask for permission before using someone as a reference.
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January budgeted selling and administrative expenses for a store opening on January 1, are as follows: sales commissions, $29,000, rent. $12,500; utilities, $5,500, depreciation, $4.400; and miscellaneous, $1,500. Utilities are paid in the month after incurrence. Other expenses are expected to be paid in cash in the month in which they are incurred. Required 1. Determine the amount of budgeted cash payments for January selling and administrative expenses. 2. Determine the amount of utilities payable the store will report on the January 31 pro forma balance sheet.
Budgeted cash payments for January selling and administrative expenses: $43,000; The amount of utilities payable that the store will report on the January 31 pro forma balance sheet is $5,500, as they are not paid in January but in the following month.
The January budgeted selling and administrative expenses include sales commissions of $29,000, rent of $12,500, utilities of $5,500, depreciation of $4,400, and miscellaneous expenses of $1,500. To determine the cash payments for January selling and administrative expenses, we need to consider only the expenses that will be paid in cash during the month.
- Sales commissions: $29,000
- Rent: $12,500
- Utilities: $0 (since they are paid in the month after incurrence)
- Depreciation: $0 (non-cash expense)
- Miscellaneous: $1,500
Total cash payments: $29,000 + $12,500 + $1,500 = $43,000
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Which of the following budgeting can meet the needs that the organization must revise their budget a lot?
Bottom-up budgeting
Zero-based budgeting
Top-down budgeting
Conventional budgeting
The budgeting method that can meet the needs of an organization that must frequently revise their budget is Bottom-up budgeting.
In this method, the budget is created from the bottom-up, meaning that each department or team within the organization submits their budget proposals to the top management.
The top management then reviews these proposals and makes necessary adjustments before finalizing the budget.
This approach ensures that all departments are involved in the budgeting process and have a say in how the budget is allocated. Additionally,
since the budget is based on the actual needs of the departments, it is more likely to be accurate and realistic. On the other hand, Top-down budgeting,
Conventional budgeting, and Zero-based budgeting are all top-down approaches that are less flexible and may not allow for frequent revisions. In Conventional budgeting,
the budget is based on the previous year's budget, with adjustments made for inflation or other factors. In Top-down budgeting, the top management creates the budget and then assigns funds to the departments.
In Zero-based budgeting, the budget starts from scratch, with no consideration given to previous budgets, but this method can be time-consuming and may not be suitable for frequent revisions.
Therefore, Bottom-up budgeting is the best budgeting method for organizations that need to revise their budgets frequently.
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149. An investment in training should require a cost - benefit analysis. True False
An investment in training should require a cost - benefit analysis. True. Conducting a cost-benefit analysis can help organizations determine whether the benefits of training outweigh the costs.
The analysis involves identifying the costs associated with training, such as course fees, materials, and instructor salaries, and then estimating the benefits that the organization will receive from the training, such as increased productivity, improved quality, and reduced turnover. If the benefits are expected to exceed the costs, then the investment in training can be justified. However, if the costs outweigh the benefits, then the organization may need to reconsider its training plans or look for alternative solutions. A cost-benefit analysis can help organizations make informed decisions about how to allocate their resources and prioritize their investments in training and development.
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Krell Industries has a share price of $22.03 today. If Krell is expected to pay a dividend of $0.98 this year and its stock price is expected to grow to $24.96 at the end of the year, what is Krell's dividend yield and equity cost of capital? The dividend yield is%. (Round to one decimal place.) The capital gain rate is%. (Round to one decimal place.) The total return is%. (Round to one decimal place.)
Krell Industries' dividend yield is 4.45%, the capital gain rate is 13.32%, and the total return is 17.77%.
To calculate Krell Industries' dividend yield, we divide the expected dividend by the current stock price:
Dividend Yield = (Expected Dividend / Current Stock Price) x 100%
Dividend Yield = ($0.98 / $22.03) x 100%
Dividend Yield = 4.45%
To calculate the capital gain rate, we subtract the current stock price from the expected stock price and divide by the current stock price:
Capital Gain Rate = ((Expected Stock Price - Current Stock Price) / Current Stock Price) x 100%
Capital Gain Rate = (($24.96 - $22.03) / $22.03) x 100%
Capital Gain Rate = 13.32%
The total return is the sum of the dividend yield and capital gain rate:
Total Return = Dividend Yield + Capital Gain Rate
Total Return = 4.45% + 13.32%
Total Return = 17.77%
Therefore, Krell Industries' dividend yield is 4.45%, the capital gain rate is 13.32%, and the total return is 17.77%.
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which of the following is the approximate internal rate of return for an investment that costs $45,880 and has net cash flows of $4,000 for 20 years? present value of 1 rate periods 5% 6% 8% 10% 20 0.3769 0.3118 0.2145 0.1486 present value of an annuity of 1 rate periods 5% 6% 8% 10% 20 12.4622 11.4699 9.8181 8.5136
The approximate internal rate of return for the investment is 7.95%. This means that the investment is expected to generate a return of 7.95% per year over the 20-year period
What is the approximate internal rate of return for an investment that costs $45,880 and has net cash flows of $4,000 for 20 years, and how does it compare to the required rate of return?To calculate the approximate internal rate of return (IRR) for the investment, we need to use the present value of the net cash flows and the initial cost of the investment.
Using the present value of an annuity formula, we can calculate the present value of the net cash flows:
PV = 4000 x 9.8181 (from the table for 8% and 20 periods)
PV = $39,272.40
Then, we can calculate the IRR using the trial and error method or a financial calculator. The IRR is the rate at which the present value of the net cash flows equals the initial cost of the investment:
45,880 = 4000 x (1-1/(1+IRR)^20)/IRR
Using the trial and error method, we can find that the IRR is approximately 7.95%.
Therefore, the approximate internal rate of return for the investment is 7.95%. This means that the investment is expected to generate a return of 7.95% per year over the 20-year period, which is greater than the required rate of return (i.e., the discount rate used in the present value calculations).
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the product-process matrix shows the relationship between process structures and product volume and variety characteristics. (True or False)
The answer for the statement is True. The product-process matrix is a framework that helps to identify the appropriate process structure to use based on the volume and variety of products being produced.
The matrix shows the relationship between the two by dividing them into four categories: job shop, batch, assembly line, and continuous flow. Job shop processes are best suited for low volume, high variety production while continuous flow processes are best for high volume, low variety production.
Batch and assembly line processes fall in between, with batch processes being suited for moderate volume and moderate variety production, and assembly line processes being suited for high volume and low to moderate variety production.
Understanding this relationship is important for companies to efficiently produce products and optimize their operations.
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