Answer:
a. The demand for puma shoes is more elastic than the demand for shoes.
Explanation:
Price elasticity of demand refers to the degree of change in the desire to buy something when there arises a change in the price of the commodity. With the increase in the price of the commodity, the desire to buy the commodity decreases. The first statement is true among the given four statements. The demand for puma shoes is subjected to the price of it. While the demand for normal shoes can be kept under the basic requirement which is not elastic.
In 2017, Cullumber Corporation incurred research and development costs as follows: Materials and equipment $111000 Personnel 131000 Indirect costs 171000 $413000 These costs relate to a product that will be marketed in 2018. It is estimated that these costs will be recouped by December 31, 2020. The equipment has no alternative future use. What is the amount of research and development costs that should be expensed in 2017
Answer:
The amount of research and development costs that should be expensed in 2017 is $413,000
Explanation:
In order to calculate the amount of research and development costs that should be expensed in 2017 we would have to use the following formula:
amount of research and development costs that should be expensed in 2017= Materials and equipment costs+ Personnel costs+Indirect costs
amount of research and development costs that should be expensed in 2017= $111,000+ $131,000+$171,000
amount of research and development costs that should be expensed in 2017=$413,000
The amount of research and development costs that should be expensed in 2017 is $413,000
The amount of research and development costs that should be expensed in 2020
$ 99000 + $ 119000 + $ 159000
$377,000
The Refining Department of SweetBeet, Inc. had 79,000 tons of sugar to account for in July. Of the 79,000 tons, 49,000 tons were completed and transferred to the Boiling Department, and the remaining 30,000 tons were 50% complete. The materials required for production are added at the beginning of the process. Conversion costs are added evenly throughout the refining process. The weighted-average method is used. Calculate the total equivalent units of production for direct materials.
Answer:
79,000 tons
Explanation:
When you use the weighted average method for determining equivalent units, the total number of equivalent units = units completed and transferred out + equivalent units in ending inventory.
In this case, since the materials are added at the beginning of the production process, all the units are 100% complete regarding direct materials.
A company determined that the budgeted cost of producing a product is $30 per unit. On June 1, there were 86000 units on hand, the sales department budgeted sales of 370000 units in June, and the company desires to have 160000 units on hand on June 30. The budgeted cost of goods sold for June would be
Answer:
The budgeted cost of goods sold for June would be $ 13,320,000
Explanation:
Budgeted cost per unit = $30
Sales budget = 370,000 units
Less: Beginning inventory = 86,000 units
Add: Ending inventory = 160,000 units
Therefore budgeted cost of goods sold for June = (370,000 - 86,000 + 160,000) × $30
= 444,000 × $30
= $13,320,000
Steve Company purchased a tractor at a cost of $180,000. The tractor has an estimated salvage value of $20,000 and an estimated life of 8 years, or 10,000 hours of operation. The tractor was purchased on January 1, 2019 and was used 2,400 hours in 2019 and 2,100 hours in 2020. On January 1, 2021, the company decided to sell the tractor for $70,000. Steve uses the units-of-production method to account for the depreciation on the tractor. Based on this information, the entry to record the sale of the tractor will show:
Answer:
Loss on sale = $38,000
Explanation:
The computation of sale of tractor is shown below:-
Total depreciation = ($180,000 - $20,000) × (2,400 + 2,100) ÷ 10000
= $72,000
Net book value on January 1, 2021 = Tractor cost - Total depreciation
= $180,000 - $72,000
= $108,000
Loss on sale = Total depreciation - Net book value on January 1, 2021
= $70,000 - $108,000
= $38,000
Therefore for computing the sale of tractor we simply applied the above formula.
The entry to record the sale of the tractor will show the loss of $38,000.
Here, we are going to calculate the loss or gain on the sale of the tractor.
Depreciation rate per hour = (Cost - Salvage value) / Total estimated hours
Depreciation rate per hour = ($180,000 - $20,000) / 10,000
Depreciation rate per hour = $160,000 / 10,000
Depreciation rate per hour = $16
Depreciation amount = Hours * Depreciation rate per hourDepreciation in 2019 = 2,400 hours * $16 per hour
Depreciation in 2019 = $38,400
Depreciation in 2020 = 2,100 hours * $16 per hour
Depreciation in 2020 = $33,600
Accumulated depreciation = Depreciation in 2019 +
Depreciation in 2020
Accumulated depreciation = $38,400 + $33,600
Accumulated depreciation = $72,000
Carrying value = Cost - Accumulated depreciation
Carrying value = $180,000 - $72,000
Carrying value = $108,000
Gain / (loss) = Sale price - Carrying value
Gain / (loss) = $70,000 - $108,000
Loss = $38,000
Therefore, the entry to record the sale of the tractor will show the loss of $38,000.
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Cesar Ruiz was reviewing his company's activities at the end of the year (2017) and decided to prepare a retained earnings statement. At the beginning of the year his assets were $530,000, liabilities were $140,000, and common stock was $120,000. The net income for the year was $250,000. Dividends of $220,000 were paid during the year. Prepare a retained earnings statement in good form. (List items that increase retained earnings first.) CESAR RUIZ COMPANY Retained Earnings Statement $ : : $ Click if you would like to Show Work for this question: Open Show Work
Answer:
Retained earnings is $300,000
Explanation:
The first task here that would aid the preparation of retained earnings statement for the current year is to first of determine the retained earnings for last year based on the information provided.
Retained earnings opening=Assets-liabilities-common stock
=$530,000-$140,000-$120,000=$270,000
Retained earnings statement for the current year
Opening retained earnings $270,000
net income for the year $250,000
Total earnings $520,000
dividends ($220,000)
Closing retained earnings $300,000
Retained earnings are $300,000, and the retained earning statement is given in the image below.
What is retained earning?After paying all direct and indirect costs, income taxes, and dividends to shareholders, a company's retained profits are the amount of profit left over.
This is the portion of the company's equity that can be utilized to invest in new equipment, research and development, and marketing.
Computation of Opening mount of retained earning:
[tex]\text{Ope. Retained Earnings}= \text{Assets - liabilities - Common Stock}\\\text{Ope. Retained Earnings}= \$5,30,000-\$1,40,000-\$1,20,000\\\text{Ope. Retained Earnings}= $270,000[/tex]
Therefore, retained earning statement is given in the image below.
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At December 31, the unadjusted trial balance of H&R Tacks reports Software of $34,500 and and zero balances in Accumulated Amortization and Amortization Expense. Amortization for the period is estimated to be $6,900. Prepare the adjusting journal entry on December 31. Prepare the T-accounts for each account, enter the unadjusted balances, post the adjusting journal entry, and report the adjusted balance.
Answer:
Dr amortization expense $6,900
Cr Accumulated amortization $6,900
Explanation:
The adjusting journal on 31 December is to reflect the amortization charge of $6,900 in both accumulated amortization and amortization expense accounts.
Find attached t-accounts,note that amortization expense account would not have a closing balance as the amount of amortization is written to income statement
Select the correct answer from each drop-down menu,
Jack has to pay
tax to the government for his house. This type of tax is
tax
Answer:
C) property
A) direct tax
Explanation:
A company purchased a 3-acre tract of land for a building site for $480,000. The company demolished the old building at a cost of $25,000, but was able to sell scrap from the building for $2,800. The cost of title transfer was $1,550 and attorney fees for reviewing the contract was $760. Property taxes paid were $9,500, of which $900 covered the period after the purchase date. The capitalized cost of the land is: Multiple Choice $514,860. $514,610. $513,110. $379,610.
Answer:
$513,110
Explanation:
The computation of the cost of the land is shown below:
= Purchase tract of land + demolished cost of old building - scrap of the building + title transfer cost + attorney fees + property taxes - amount covered the period
= $480,000 + $25,000 - $2,800 + $1,550 + $760 + $9,500 - $900
= $513,110
We simply applied the above formula
Your staff uses expense accounts for job-related travel. The accounting department has changed the way such expenses are handled. You need to inform your staff about the new process for reimbursement. How can you explain the new process in a way they will be able to refer to later
Answer: A memo
Explanation:
Of all the possible ways listed, a Memorandum would be the best way to go.
In businesses, Memos are considered a way to send information within the company about any changes or other happenings within a company. Memos can be sent to every individual or hung around the business. This way everybody can see it and be able to refer back to it. Memos also have proven overtime in the business world that they work for this purpose so using it would be best.
Face to face meetings would have helped explain the changes better but then people would not really be able to refer back to it.
Dean, the president of Billing & Credit Company, promises to pay his employee Ewing, who is dangerously obese, $10 for every pound that he loses within the next eleven months. Ewing agrees, diets and exercises, losing 154 pounds over the stipulated period and asks Dean for $1,540. Dean refuses to pay, saying that he does not remember the promise, but that even if he did make it, there was no consideration, and Ewing's improved health is sufficient benefit for his effort and sacrifice. Ewing files a suit against Dean. In whose favor is the court likely to rule and why?
Answer:
See the explanation below.
Explanation:
The court likely to rule in favor of Ewing.
The reason is that the enough consideration that gives backing to a promise in this case is generally the waiver of a legal right to eat to obesity as requested by the other party.
The evidence that Ewing has lost 154 pounds in weight over the stipulated period is a consideration that sufficient enough under the law. The payment of $10 pound that Ewing has lost is a promise. The fact that Ewing also benefit from the weight loss does not matter.
Vandy Corporation's balance sheet and income statement appear below: Comparative Balance Sheet Ending Balance Beginning Balance Assets: Cash and cash equivalents $ 31 $ 29 Accounts receivable 61 73 Inventory 59 61 Property, plant, and equipment 684 550 Less accumulated depreciation 349 319 Total assets $ 486 $ 394 Liabilities and stockholders' equity: Accounts payable $ 53 $ 54 Accrued liabilities 20 21 Income taxes payable 52 48 Bonds payable 203 190 Common stock 61 60 Retained earnings 97 21 Total liabilities and stockholders' equity $ 486 $ 394 Income Statement Sales $ 807 Cost of goods sold 492 Gross margin 315 Selling and administrative expense 182 Net operating income 133 Gain on sale of equipment 16 Income before taxes 149 Income taxes 45 Net income $ 104 The company sold equipment for $18 that was originally purchased for $14 and that had accumulated depreciation of $12. It paid a cash dividend of $28 during the year and did not retire any bonds payable or repurchase any of its own common stock. Required: Prepare a statement of cash flows for the year using the indirect method.
Answer:
See below the statement of Cash flow from Vandy Corporation.
Explanation:
Vandy Corporation
Statement of Cash Flow
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income $104
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation on Fixed Assets ($349-$319+$12) $42
Gain on Sale of Equipment ($16)
(Increase) Decrease in Current Assets:
Accounts Receivables $12
Inventory $2
Increase (Decrease) in Current Liabilities:
Accounts Payable ($1)
Accrued Liabilities ($1)
Income taxes payable $4
Net Cash provided by Operating Activities $146
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of Equipment $18
Purchase of Property, plant and equipment ($684-$550+$14) ($148)
Net Cash Flow from Investing Activities ($130)
CASH FLOWS FROM FINANCING ACTIVITIES:
Bonds Payable $13
Issuance of Common Stock $1
Payment of Dividends ($28)
Net Cash from Financing Activities ($14)
Net Increase (Decrease) in Cash $2
Opening Cash Balance $29
Ending Cash Balance $31
Lakeside Components wishes to purchase parts in one month for sale in the next. On June 1, the company has 15,000 parts in stock, although sales for June are estimated to total 13,600 parts. Total sales of parts are expected to be 10,500 in July and 12,700 in August. Parts are purchased at a wholesale price of $30. The supplier has a financing arrangement by which Lakeside Components pays 60 percent of the purchase price in the month when the parts are delivered and 40 percent in the following month. Lakeside purchased 14,000 parts in May. Required: a. Estimate purchases (in units) for June and July. b. Estimate the cash required to make purchases in June and July.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Beginning inventory (parts)= 15,000 parts
Sales June= 13,600
Sales July= 10,500
Sales August= 12,700
Parts are purchased at a wholesale price of $30.
Purchasing arrangement:
60 percent on the month of the purchase.
40 percent in the following month.
Lakeside purchased 14,000 parts in May.
A) To calculate the purchase for June and July, we need to use the following formula:
Purchases= sales + desired ending inventory - beginning inventory
June= 13,600 - 15,000= -1,400
July= 10,500 - 1,400= 9,100
B) Cash Required:
Purchase from the month
Purchase from the month before
June:
Purchase from the month= 0
Purchase from the month before= (14,000*30)*0.4= 168,000
July:
Purchase from the month= (9,100*30)*0.6= 163,800
Purchase from the month before= 0
Bingo Land Inc. has a defined benefit pension for their employees. For the fiscal year 2019, the PBO beginning balance was $1,800. During the year, Service cost was $400. There was a Loss on PBO of ($150) during the year. The discount rate used by the actuaries is 6%. Plan assets had a beginning balance of $1,200 for 2019. The plan return was $ 144 with an expected return of $96 for the year. The net loss on pension beginning balance was ($50) at 1/1/2019. Bingo Land contributed $ 50 to plan assets at the end of the year. What is the balance in Net pension Gain/(Loss) as of 12/31/2019
Answer:
Ending balance is $152
Explanation:
The table is attached below
A mechanical engineer purchased a machine 1 year ago for $85,000 and is now seeing that it costs more to operate than anticipated. The engineer expected to use the machine for 10 years with annual maintenance costs of $22,000 and a salvage value of $10,000. Last year though, it cost $35,000 to maintain the machine and these costs are expected to increase to $36,500 this year and increase by $1500 each year after. The market value is now estimated to be $85,000-$10,000k, where k is the number of years since the machine was purchased. It is now estimated this machine will be useful for a maximum of 5 more years. Perform a replacement study now and determine the values of P, n, AOC, and S of this defender.
Answer:
P = -$75000
n = 5 years
AOC = $35000
and S = $10000
Explanation:
Considering that the machine that is expected to last 10 will only do for 5 years and that the market value is now $85000 - $10000
we can the say,
P = -($85000 - $10000)
= - $75000
n = 5 years which is the number of years it is expected to last
AOC = $35000
S = $10000 which is the savaged value on the machine
g Based on the Keynesian model, one reason to support government spending increases over tax cuts as a tool for stimulating the economy is: Group of answer choices the government-spending multiplier is smaller than the tax multiplier. the government-spending multiplier is larger than the tax multiplier. tax cuts do not cause the budget deficit to increase. increases in government spending do not cause the budget deficit to increase.
Answer:
The answer is: The multiplier of public spending is greater than the tax multiplier.
Explanation:
Unemployment is caused by insufficient global demand. Therefore, to combat unemployment, aggregate demand (Da) will have to be increased, and for this, according to Keynes' formula, the following components must be acted on:
-Increase demand for consumer goods (C)
To stimulate consumption, taxes will have to be reduced, thus causing an increase in the disposable income of families.
-Increase the demand for investment goods (I)
This increase will be achieved by reducing the cost of money; in other words, lowering interest rates, thus encouraging companies to invest.
-Increase public sector demand (G)
It comes from the increase in public spending by the State (more roads, more hospitals).
-Increase the demand of international markets (X-M)
To promote exports, the exchange rate will have to be reduced. Increasing exports boosts domestic production.
Rembrandt Paint Company had the following income statement items for the year ended December 31, 2021 ($ in thousands): Sales revenue $ 24,000 Cost of goods sold $ 13,500 Interest revenue 220 Selling and administrative expense 3,100 Interest expense 420 Restructuring costs 1,400 In addition, during the year the company completed the disposal of its plastics business and incurred a loss from operations of $2.2 million and a gain on disposal of the component’s assets of $3.2 million. 600,000 shares of common stock were outstanding throughout 2021. Income tax expense has not yet been recorded. The income tax rate is 25% on all items of income (loss). Required: Prepare a multiple-step income statement for 2021, including EPS disclosures. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands except earnings per share. Round EPS answers to 2 decimal places.)
Answer:
Rembrandt Paint CompanyIncome Statement - December 31, 2021Sales revenues $24,000,000
- Cost of goods sold ($13,500,000)
Gross margin $10,500,000
Operating expenses:
- Selling and adm. expenses ($420,000)
- Restructuring costs ($1,400,000)
Total operating expenses ($1,820,000)
Income from operations $8,620,000
Other revenue and expenses:
Gain on sales of assets $3,200,000
Interest revenue $220,000
Loss from discontinued oper. ($2,200,000)
Interest expense ($420,000)
Total other revenue and expenses $800,000
Net income pre-tax $9,420,000
Income taxes (25%) ($2,355,000)
Net income after taxes $7,065,000
Shares outstanding 600,000
Earnings per share (EPS) $11.78
Pharmaceutical Company (PC) has made record profits in the last 10 years. For each of the first 9 years, PC has declared dividends. In the 10th year, however, PC decides not to decare dividends and to reinvest that money into new drugs. Harry, a shareholder who relies on the dividends for income, sues the Board of Directors and the Officers for failing to issue a divident in the 10th year. Who wins and why?
Answer:
As in my consideration the pharmaceutical organization might won the case , as for all the dividend bonds concerned decision are taken by the organizational financial advisor, and it's the responsibility of financial advisor to choose whether to issue the revenue as dividend bonds or to hold them for more investment to generate large revenue. Thus it's the choice of the corporate that whether to issue dividend or not.
The dividend is the portion of profit that is paid to the shareholders in respect to the funds invested by them for the long-term. It is paid to the preference shareholders at a fixed rate at the end of each period while it is paid to the equity shareholders based upon the amount of profit.
The case for the dividend is won by the pharmaceutical organization.
The reason is the payment or non-payment of dividend to the shareholders' is a concerned decision that is taken by the board of directors and financial advisors of the organization.
It becomes responsibility of the financial advisor to take advantageous decision for the organization and shareholders, that is the payment of dividend is the current period is feasible or holding them for reinvestment and earning more revenue is feasible.
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Sarafiny Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year. Beginning Inventory Ending Inventory Finished goods (units) 27,000 77,000 Raw material (grams) 57,000 47,000 Each unit of finished goods requires 3 grams of raw material. The company plans to sell 740,000 units during the year. The number of units the company would have to manufacture during the year would be:
Answer:
790,000
Explanation:
Data provided
Budgeted sales = 740,000
Desired ending inventory = 77,000
Beginning inventory = 27,000
The computation of number of units is shown below:-
Number of units to be manufactured = Budgeted sales + Desired ending inventory - Beginning inventory
= 740,000 + 77,000 - 27,000
= 817,000 - 27,000
= 790,000
Therefore for computing the number of units manufactured we simply applied the above formula.
A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company bases its variable manufacturing overhead standards on direct labor-hours. Standard hours per unit of output 3.20 DLHs Standard variable overhead rate $ 10.55 per DLH The following data pertain to operations for the last month: Actual direct labor-hours 9,400 DLHs Actual total variable manufacturing overhead cost $ 95,780 Actual output 2,700 units What is the variable overhead efficiency variance for the month?
Answer:
Variable overhead efficiency variance $ 8,018 Unfavorable
Explanation:
Variable overhead efficiency variance: Variable overhead efficiency variance aims to determine whether or not their exist savings or extra cost incurred on variable overhead as a result of workers being faster or slower that expected.
Since the variable overhead is charged using labour hours, any amount by which the actual labour hours differ from the standard allowable hours would result in a variance
Hours
2,700 units should have taken (2,700 × 3.20) 8640
but did take (actual hours) 9,400
Efficiency variance in hours 760 unfavorable
standard variable overhead cost per hour $10.55
Variable overhead efficiency variance $ 8,018 Unfavorable
Variable overhead efficiency variance $ 8,018 Unfavorable
The required reserve ratio is 0.05. If the Federal Reserve buys $1,000,000 worth of bonds from a bond dealer who has her account at Bank XYZ above and she deposits the entire $1,000,000 into a checking account at Bank XYZ, what will be the new required and excess reserves for this bank (assume no new loans are made)? (Remember that required reserves are found by applying the required reserve ratio to the amount of total checkable deposits.)
Missing information:
total deposits in bank XYZ = $4,000,000
total reserves = $3,800,000
Answer:
the required reserve = $250,000
excess reserves = $4,550,000
Explanation:
required reserve ratio = 5%
the Fed buys $1,000,000 worth of bonds
the $1,000,000 are deposited entirely in bank XYZ
total checkable deposits will increase to $5,000,000
the required reserve = $5,000,000 x 5% = $250,000
excess reserves = total checkable deposits - total loans - required reserves = $5,000,000 - $200,000 - $250,000 = $4,550,000
Miscavage Corporation has two divisions: the Beta Division and the Alpha Division. The Beta Division has sales of $235,000, variable expenses of $132,600, and traceable fixed expenses of $63,800. The Alpha Division has sales of $545,000, variable expenses of $309,800, and traceable fixed expenses of $121,500. The total amount of common fixed expenses not traceable to the individual divisions is $120,200. What is the company's net operating income
Answer:
Operating income $32,100
Explanation:
The operating income for the company is the to be determined by aggregating the sales and cost figures of the two divisions . This is done as follows
$
Total sales (235,000 + 545,000) = 780,000
Variable expenses(132600+309800) = (442,400)
Traceable fixed expenses(63800+121500) = (185300)
Common fixed expenses (120200 )
Operating income 32,100
Riegel Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2014, consists of products D, E, F, G, H, and I. Relevant per unit data for these products appear below.
Item D Item E Item F Item G Item H Item I
Estimated selling price $120 $110 $95 $90 $110 $90
Cost 75 80 80 80 50 36
Cost to complete 30 30 25 35 30 30
Selling costs 10 18 10 20 10 20
Using the LCNRV rule, determine the proper unit value for statement of financial position reporting purposes at December 31, 2014, for each of the inventory items above.
Answer:
The answer is 75 that is what i put and got it correct
On January 1, a company issued and sold a $408,000, 9%, 10-year bond payable, and received proceeds of $403,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The journal entry to record the first interest payment is:
Answer and Explanation:
The Journal entry is shown below:-
Bond interest expense Dr, $18,610
To Cash $18360
To Discount on bonds $250
(Being first interest payment is recorded)
For recording the first interest payment we simply debited the bond interest expenses as it increased the expenses and we credited cash and discount on bonds as it reduced the assets and the discount should be credited
Working Note
Total discount on bonds issued = Sold bonds - Received proceeds
= $408,000 - $403,000
= $5,000
Amortization of Semi Annual Discount = Total discount on bonds issued ÷ Number of periods
= $5,000 ÷ 20
= $250
Cash interest paid = Sold bonds × Interest rate × From Jan to June ÷ Total number of months in a year
= $408,000 × 9% × 6 ÷ 12
= $18,360
Total Interest expense = Cash interest paid + Amortization of Semi Annual Discount
= $18,360 + $250
= $18,610
g Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley issued $20,000,000 of five-year, 9% bonds at a market (effective) interest rate of 8%, receiving cash of $20,811,010. Interest is payable semiannually on April 1 and October 1. a. Journalize the entry to record the issuance of bonds on April 1, 20Y1. If an amount box does not require an entry, leave it blank. b. Journalize the entry to record the first interest payment on October 1, 20Y1, and amortization of bond premium for six months, using the straight-line method. If an amount box does not require an entry, leave it blank. c. Why was the company able to issue the bonds for $20,811,010 rather than for the face amount of $20,000,000? The market rate of interest is the contract rate of interest.
Answer:
Explanation:
a
Cash 20811010
Bonds payable 20000000
Premium on Bonds payable 811010
b
Interest expense 818899
Premium on Bonds payable 81101 =811010/5*6/12
Cash 900000 =20000000*9%*6/12
c
The market rate of interest will be lower than the contract rate of interest.
Scenario 28-1 Suppose that the Bureau of Labor Statistics reports that the entire adult population of Mankiwland can be categorized as follows: 25 million people employed, 3 million people unemployed, 1 million discouraged workers, and 1 million people who are either students, homemakers, retirees, or other people not seeking employment. Refer to Scenario 28-1. How many people are unemployed
Answer: 3 million.
Explanation:
Unemployment is defined as when a member of a Country's labor force is jobless but actively looking for work.
In the Scenario 28-1, the discouraged people are not counted as they are discouraged and not looking for work and 1 million other people being students and retirees amongst others are not looking for work either.
The unemployed section of Mankiwland is therefore the 3 million unemployed people.
During January, a company incurs employee salaries of $2.6 million. Withholdings in January are $198,900 for the employee portion of FICA, $390,000 for federal income tax, $162,500 for state income tax, and $26,000 for the employee portion of health insurance (payable to Company B). The company incurs an additional $161,200 for federal and state unemployment tax and $78,000 for the employer portion of health insurance. Required: 1.-3. Record the necessary entries in the Journal Entry Worksheet below. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions (i.e. 5 should be entered as 5,000,000).)
Answer:
The journal entries to record would be the following:
Jan-31 Debit Credit
Salaries Expenses $2,600,000
Income Tax payable ($390,000+$162,500) $522,500
FICA Tax payable $198,900
Accounts payable $26,000
Salaries payable Balance $1,822,600
Jan-31 Debit Credit
Salaries Expenses $78,000
Accounts payable $78,000
Jan-31 Debit Credit
Payroll Tax expense $360,100
FICA Tax Payable $198,900
Unemployment Tax Payable $161,200
Explanation:
The journal entries to record would be the following:
To record employee salary expense and withholdings
Jan-31 Debit Credit
Salaries Expenses $2,600,000
Income Tax payable ($390,000+$162,500) $522,500
FICA Tax payable $198,900
Accounts payable $26,000
Salaries payable Balance $1,822,600
To record fringe benefit provided by employer
Jan-31 Debit Credit
Salaries Expenses $78,000
Accounts payable $78,000
To record employer payroll taxes
Jan-31 Debit Credit
Payroll Tax expense $360,100
FICA Tax Payable $198,900
Unemployment Tax Payable $161,200
Pharoah Corporation had the following activities in 2020. 1. Payment of accounts payable $843,000 4. Collection of note receivable $104,000 2. Issuance of common stock $256,000 5. Issuance of bonds payable $466,000 3. Payment of dividends $333,000 6. Purchase of treasury stock $45,000 Compute the amount Pharoah should report as net cash provided (used) by financing activities in its 2020 statement of cash flows. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Answer:
The amount Pharoah should report as net cash provided (used) by financing activities in its 2020 statement of cash flows is $344,000.
Explanation:
Pharoah Corporation
Statement of cash flows (extract)
Proceeds from common stock $256,000
Proceed from bond payable $466,000
Dividend paid ($333,000)
Purchase of treasury stock ($45,000)
Net cash flows from financing activities $344,000
Note that the payment of accounts payable and collection of notes receivable only affect the operating activities section of the cash flows.
Evanson Company expects to produce 512,000 units of their product during the year. Monthly production is expected to range from 40,000 to 80,000 units. The company has budgeted manufacturing costs per unit to be as follows: Direct materials $ 7 Direct labor 8 Variable manufacturing overhead 9 Fixed manufacturing overhead 3 Prepare a flexible manufacturing budget using 20,000 unit increments.
Answer:
Total Cost using 20,000 increments is as follows:
40,000 units - $1,080,000 (Total Cost)
60,000 units - $1,620,000 (Total Cost)
80,000 units - $2,160,000 (Total Cost)
Explanation:
Monthly Flexible Manufacturing Budgets
Units Produced 40,000 60,000 80,000
Direct Material (7/unit) 280,000 420,000 560,000
Direct Labor (8/unit) 320,000 480,000 640,000
Variable Overhead (9/unit) 360,000 540,000 720,000
Total Variable Cost 960,000 1,440,000 1,920,000
Fixed Overhead (3/unit) 120,000 180,000 240,000
Total Cost $1,080,000 $1,620,000 $2,160,000
The following items were taken from the financial statements of Mint, Inc., over a three-year period: Item201820172016 Net Sales $355,000 $336,000 $300,000 Cost of Goods Sold 214,000 206,000 186,000 Gross Profit $141,000 $130,000 $114,000 Compute the amount and percentage change from 2016 to 2017. (Round percentages to 1 decimal place, e.g. 17.5%.) ItemAmountPercentage Net Sales $Enter a dollar amount Enter percentages % Cost of Goods Sold Enter a dollar amount Enter percentages % Gross Profit $Enter a total dollar amount Enter percentages %
Answer:
2016 2017
Net Sales $36,000 12% $19,000 5.7%
Cost of Goods Sold $20,000 10.8% $19,000 9.2%
Gross Profit $16,000 8.6% $11,000 5.3%
Explanation:
Net Sales:
2016: Net Sales of 2017 - Net Sales of 2016 = $336,000 - $300,000 =$36,000
2017: Net Sales of 2018 - Net Sales of 2017 = $355,000 - $336,000 = $19,000
Percentage Change in Net Sales:
2016: ($336,000 - $300,000) / $300,000 = 12%
2017: ($355,000 - $336,000) / $336,000 = 5.7%
Cost of Goods Sold:
2016: COGS of 2017 - COGS of 2016 = $206,000 - $186,000 =$20,000
2017: COGS of 2018 - COGS of 2017 = $214,000 - $206,000 = $19,000
Percentage Change in Cost of Goods Sold:
2016: $20,000 / $186,000 = 10.8%
2017: $19,000 / $206,000 = 9.2%
Gross Profit:
2016: Gross Profit of 2017 - Gross Profit of 2016 = $130,000 - $114,000 =$16,000
2017: Gross Profit of 2018 - Gross Profit of 2017 = $141,000 - $130,000 = $11,000
Percentage Change in Gross Profit:
2016: $16,000 / $186,000 = 8.6%
2017: $11,000 / $206,000 = 5.3%
The classical dichotomy and the neutrality of money
The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction.
Maria spends all of her money on paperback novels and beignets. In 2011 she earned $27.00 per hour, the price of a paperback novel was $9.00, and the price of a beignet was $3.00.
Which of the following give the nominal value of a variable?
1-The price of a beignet is $3.00 in 2011.
2-Maria's wage is $27.00 per hour in 2011.
3-The price of a beignet is 0.33 paperback novels in 2011.
Which of the following give the real value of a variable?
1-The price of a paperback novel is 3 beignets in 2011.
2-Maria's wage is 9 beignets per hour in 2011.
3-The price of a paperback novel is $9.00 in 2011.
Suppose that the Fed sharply increases the money supply between 2011 and 2016. In 2016, Maria's wage has risen to $54.00 per hour. The price of a paperback novel is $18.00 and the price of a beignet is $6.00.
In 2016, the relative price of a paperback novel is _________
Between 2011 and 2016, the nominal value of Maria's wage (increases/decreases/remains the same) and the real value of her wage ____________
Monetary neutrality is the proposition that a change in the money supply ________ nominal variables and ______ real variables.
Answer:
1. Relative price = $3
2. Increases
3. affects , not affect
Explanation:
As per the data given in the question,
1) The relative price of a paperback novel in 2016 = Maria,s wage ÷ Price of a paperback novel
= $54÷$18
= $3
2) Between 2011 and 2016, the nominal value increases and the real value of Maria's wage remains the same.
3)Monetary neutrality is proposition that the change in the money supply affects the nominal variables but it does not affect the real variables.
