The statement that is the advantage of using the allowance method is "It records estimated bad debts expense in the period when the related sales are recorded, So the given correct statement is option a.
The allowance method is used in accounting for managing expected credit losses. An allowance is created for doubtful accounts as a percentage of credit sales, which aids in forecasting the likelihood of debts becoming uncollectible.
The total amount of credit sales and the percentage of expected bad debts are used to calculate the allowance amount. The difference between the balance in the allowance for doubtful accounts and the balance of the account is the net realizable value of the receivable account.
The main advantage of the allowance method is that it records estimated bad debts expense in the period when the related sales are recorded. The portion of credit sales that will be uncollectible is an expense, and under the allowance method, this is recorded in the period when the related sales are made.
This is crucial because it allows for the matching principle, which ensures that expenses are recorded in the same period as the related revenues. This results in more accurate financial statements.
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The statement that is an advantage of using the allowance method is: It records estimated bad debts expense in the period when the related sales are recorded.
An advantage of using the allowance method is that it records estimated bad debts expense in the period when the related sales are recorded. This is the most significant benefit of using the allowance method. The allowance method is a technique for calculating the estimated value of doubtful accounts receivable at the end of an accounting cycle.
Under the allowance method, a company estimates the value of uncollectible accounts by creating an allowance for doubtful accounts. The allowance for doubtful accounts is a reduction in the value of accounts receivable that appears on the balance sheet. The purpose of the allowance for doubtful accounts is to ensure that the accounts receivable figure on the balance sheet is a realistic representation of the amount the company expects to receive in cash. By making an adjustment to accounts receivable to represent the estimated amount of uncollectible accounts, the allowance method allows for a better matching of expenses and revenues.
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A water source in B.C. can supply only 100 units of water/month (with zero cost of production). There are two competing users of this water: urban and rural dwellers. The monthly demands for the two groups are given by, Urban: P=50−Q Rural: P=70−Q. (a) Assuming that the urban users have exclusive private right over the resource and that they can band together and charge a (uniform) monopoly price, how much water will they consume and how much will they sell to the rural users? Draw a diagram. (8 pts) (b) Calculate the DWL caused by the allocation in Part (a) (c) If the Urban users can perfectly price discriminate, what would be the resulting allocation? Draw a diagram and explain if this allocation is efficient?
(a) Under the monopoly price, urban users consume 50 units and sell 50 units to rural users.
(b) Perfect price discrimination may not lead to an efficient allocation as it depends on individual willingness to pay.
(a) Under the monopoly price, the urban users will consume 50 units of water and sell the remaining 50 units to the rural users.
(b) The deadweight loss (DWL) caused by the monopoly allocation can be calculated as the difference between the socially optimal quantity (where marginal benefit equals marginal cost) and the monopoly quantity of 50 units.
(c) If the urban users can perfectly price discriminate, they will charge different prices to each individual based on their willingness to pay.
The resulting allocation will depend on the specific demand curves of the urban and rural users.
However, it is important to note that even though price discrimination may maximize the urban users' profit, it does not necessarily guarantee an efficient allocation as it may still result in welfare losses for some consumers.
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Which of the following statements is correct for the Quick Ratio? A. Using cash to buy inventory will increase the quick ratio B. Using cash to buy inventory will reduce the quick ratio C. Using cash to buy inventory will not affect the quick ratio D. The quick assets refers to the residual amount after the deduction of cash from the total current assets
The right answer is B. Using cash to buy inventory will reduce the quick ratio. Option B is correct because using cash to buy inventory reduces the quick assets and, subsequently, reduces the Quick Ratio.
The Quick Ratio, also known as the Acid-Test Ratio, is a financial ratio used to measure a company's liquidity and ability to pay its short-term obligations. It provides a more conservative measure of liquidity compared to the Current Ratio by excluding inventory from the calculation.
The Quick Ratio is calculated as follows:
Quick Ratio = (Cash + Cash Equivalents + Marketable Securities + Accounts Receivable) / Current Liabilities
Inventory is not included in the numerator because it is considered less liquid and may take time to convert into cash. Therefore, using cash to buy inventory reduces the available cash and quick assets in the numerator while the current liabilities remain unchanged. As a result, the Quick Ratio decreases.
Option B is correct because using cash to buy inventory reduces the quick assets and, subsequently, reduces the Quick Ratio.
Option A is incorrect because using cash to buy inventory decreases the available cash and, therefore, reduces the quick assets, resulting in a lower Quick Ratio.
Option C is incorrect because using cash to buy inventory does affect the quick ratio, as explained above.
Option D is incorrect because the quick assets do not refer to the residual amount after the deduction of cash from the total current assets. Quick assets refer to the liquid assets that can be readily converted to cash or used to pay off current liabilities, such as cash, cash equivalents, marketable securities, and accounts receivable.
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As an enrolled environmental management honours student, you are, and must see yourself as a leader. Your education brings knowledge and understanding which you should use to the benefit of the people around you.
5.1 Debate your role as citizen and leader in your community to improve the environment around you. (4)
5.2Then, identify an environmental problem or issue near you or close to your heart. Narrate how can you bring change in your own behavior (if you need to), and in your immediate community to change a certain situation. (5)
5.3Proof of submission of 5.1 and 5.2 on the Discussion Forum. (1)
By actively engaging and involving my community, I believe we can make a significant positive impact in reducing plastic pollution.
5.1 As a citizen and leader in my community, my role in improving the environment is crucial. I have a responsibility to educate and raise awareness about environmental issues, and inspire others to take action. As a leader, I can organize community events, workshops, and campaigns to promote sustainable practices such as waste reduction, energy conservation, and the importance of preserving natural resources.
By engaging with local schools, businesses, and organizations, I can foster partnerships and collaborations to implement environmentally friendly initiatives. Additionally, I can advocate for sustainable policies and practices at the local government level to ensure long-term environmental protection.
5.2 One environmental issue close to my heart is plastic pollution. To bring change in my own behavior, I can start by reducing my personal use of single-use plastics, such as plastic bags, straws, and water bottles. I will switch to reusable alternatives and encourage others to do the same. In my immediate community, I can organize clean-up drives in local parks, beaches, and rivers to raise awareness about the impacts of plastic pollution.
Additionally, I can collaborate with local businesses to promote plastic-free initiatives, such as encouraging them to use eco-friendly packaging and offering incentives for customers who bring their own reusable containers. By actively engaging and involving my community, I believe we can make a significant positive impact in reducing plastic pollution.
Please note that the proof of submission for 5.1 and 5.2 would need to be provided in the designated Discussion Forum as per the instructions.
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COMPLETE THIS QUESTION IN A MICROSOFT WORD DOCUMENT AND UPLOAD IN MOODLE
Demand for Sweet Tooth Limited follows a seasonal pattern – growing through the fall months and culminating in December, with small peaks in January (for after –season mark-downs, exchange and accessory purchases) and July (for Christmas-in-July specials).
Month Demand (cases) Month Demand (cases)
January 1000 July 500
February 400 August 500
March 400 September 1000
April 400 October 1500
May 400 November 2500
June 400 December 3000
Each worker can produce on average 100 cases of cakes each month.
Overtime is limited to 300 cases, and subcontracting is unlimited.
No cases of cakes are currently in inventory.
The wage rate is $10 per case for regular production, $15 for overtime production, and $25 for subcontracting.
No stock out are allowed. Holding cost is $1 per case per month.
Increasing the workforce costs approximately $1,000 per worker.
Decreasing the workforce costs $500 per worker.
Management would like to know the cost for the following scenarios:
a. The cost for the level production over the 12 month.
b. The cost to produce to meet demand each month.
c. The cost to increase or decrease the workforce in five-worker increments.
By analyzing the given information and applying appropriate calculations, we can determine the costs for different production scenarios: level production over 12 months, producing to meet demand each month, and increasing or decreasing the workforce in five-worker increments.
To calculate the cost for level production, we need to determine the average monthly demand and compare it to the production capacity. Since each worker can produce an average of 100 cases per month, and the total demand over 12 months is 13,700 cases (sum of monthly demands), we can calculate the required number of workers as follows:
Required number of workers = Total demand / Average monthly production
= 13,700 cases / 100 cases
= 137 workers
Since each worker costs $1,000 to hire, the cost for the level production over the 12 months would be:
Cost for level production = Number of workers * Cost per worker
= 137 workers * $1,000 per worker
= $137,000
b. The cost to produce to meet demand each month:
In this scenario, we will adjust the workforce each month to meet the demand. We need to calculate the number of workers required to produce the demand for each month and multiply it by the corresponding cost per worker.
The cost to produce to meet demand each month can be calculated as follows:
Cost to produce = (Number of workers * Cost per worker) + Holding cost
= (Number of workers * Cost per worker) + (Demand - Production) * Holding cost
By calculating this for each month and summing up the costs, we can determine the total cost to produce to meet demand each month.
c. The cost to increase or decrease the workforce in five-worker increments:
To calculate the cost of increasing or decreasing the workforce, we need to consider the cost of hiring or letting go of workers. The cost to increase the workforce is $1,000 per worker, and the cost to decrease the workforce is $500 per worker.
We can calculate the cost for increasing or decreasing the workforce in five-worker increments by multiplying the number of workers by the corresponding cost per worker and summing up the costs. These costs will provide valuable insights for management to make informed decisions regarding production and workforce management.
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Consider the following OLG economy: individuals are endowed with y units of the consumption good when young and nothing when old. Preferences are such that individuals would like to consume in both periods of life. Fiat money is supplied by the government and is constant. The population grows at rate n, N4 = nNt-1. In each period, the government taxes each young individual 7 goods. The total revenue of the tax is then distributed among the old who are alive in that period as lump-sum transfers. (a) What is the amount of lump-sum transfer received by each old in period t? (1 mark) (b) Write down the first- and second-period budget constraints facing a typical individual in period t. Combine the constraints to find the lifetime budget constraint. (2 marks) (c) Find the rate of return to money Vt+1/V4 in a stationary monetary equilibrium. (1 mark) (d) Graph the stationary monetary equilibrium and indicate the levels of C1 and C2 that would be chosen by an individual in this equilibrium. (1 mark) (e) Write down the resource constraint facing the planner. On the graph you drew in part (d), find the golden rule allocation. (1 mark) (f) Suppose that the tax t is not larger than the real value of money individuals would choose to hold in the absence of the tax. Does a change in t affect an individual's utility in our economy? (2 marks) (g) Suppose that tax collection and redistribution are costly, so that for every unit of tax collected from the young, only 0.5 unit is available to distribute to the old. How does your answer in (f) change?
(a) In this OLG economy, the amount of lump-sum transfer received by each old individual in period t is equal to the total tax revenue divided by the number of old individuals alive in that period. Since each young individual is taxed 7 goods and the population grows at rate n, the total tax revenue in period t is 7 times the number of young individuals in period t, which is 7Nt. The number of old individuals alive in period t is Nt-4, as they were young in period t-4. Therefore, the amount of lump-sum transfer received by each old individual in period t is (7Nt)/(Nt-4).
(b) The first-period budget constraint facing a typical individual in period t is given by: Ct + Vt/(1+r) = y - t, where Ct represents consumption in period t, Vt is the amount of money held by the individual in period t, r is the rate of return, y is the endowment of the consumption good when young, and t is the tax paid by each young individual.
The second-period budget constraint is: (1+r)Ct+1 = Vt, where Ct+1 represents consumption in period t+1.
Combining these two constraints, we find the lifetime budget constraint: Ct + (1+r)Ct+1 = y - t.
(c) In a stationary monetary equilibrium, the rate of return to money Vt+1/V4 is equal to 1+r, where r is the rate of return. This is because the value of money held by the old in period t+1 should grow at the same rate as the general rate of return on savings.
(d) Graphing the stationary monetary equilibrium would require specific numerical values for variables such as consumption and money holdings. Without these values, it is not possible to determine the exact levels of C
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ABC Corp. Invests $600,000 this year in a three-year project. The investment will have the salvage value of $150,000. The performance of the project over the threeyear span was as follows: At Year 1. the project had $300,000 in revenues, $30,000 in costs of goods sold, 532.000 in other operating expenses, and $20,000 in interest payments. Thit tax: rate was 21% At Year 2 , the project had $310,000 in revenues. $40,000 in conts of goods sold, $35,000 in other operating expenses, and $20,000 in interest payments, The tar rates was 21 co. At Wear 3 , the project had $305.000 in revenues, $41.000 in costs of koods sold, $33,000 in other operating expenses, and $22.000 in interest payments. The tax riete was 2196 What is this projocts average accounting return during the throeyear span? HINT: Be sure to set ap your degreciation expenses based on the duration of the project
o 15,16%
o 14,12%
o 13,48%
o 14,32%
The average accounting return for the three-year span of the project is approximately 37.53%. This metric provides a measure of the project's profitability relative to the average investment.
To calculate the average accounting return (AAR) for the three-year span, we need to determine the average net income over the investment's life and divide it by the average investment.
First, let's calculate the net income for each year:
Year 1:
Net income = Revenues - Costs of goods sold - Other operating expenses - Interest payments - Taxes
= $300,000 - $30,000 - $32,000 - $20,000 - (0.21 * ($300,000 - $30,000 - $32,000 - $20,000))
= $300,000 - $30,000 - $32,000 - $20,000 - (0.21 * $218,000)
= $300,000 - $30,000 - $32,000 - $20,000 - $45,780
= $172,220
Year 2:
Net income = $310,000 - $40,000 - $35,000 - $20,000 - (0.21 * ($310,000 - $40,000 - $35,000 - $20,000))
= $310,000 - $40,000 - $35,000 - $20,000 - (0.21 * $215,000)
= $310,000 - $40,000 - $35,000 - $20,000 - $45,150
= $170,850
Year 3:
Net income = $305,000 - $41,000 - $33,000 - $22,000 - (0.21 * ($305,000 - $41,000 - $33,000 - $22,000))
= $305,000 - $41,000 - $33,000 - $22,000 - (0.21 * $209,000)
= $305,000 - $41,000 - $33,000 - $22,000 - $43,890
= $165,110
Next, let's calculate the average net income:
Average net income = (Net income Year 1 + Net income Year 2 + Net income Year 3) / 3
= ($172,220 + $170,850 + $165,110) / 3
= $508,180 / 3
= $169,393.33
The average investment is the initial investment minus the salvage value:
Average investment = Initial investment - Salvage value
= $600,000 - $150,000
= $450,000
Finally, let's calculate the AAR:
AAR = Average net income / Average investment
= $169,393.33 / $450,000
≈ 0.3753
Converting to a percentage, the AAR is approximately 37.53%.
In conclusion, the average accounting return for the three-year span of the project is approximately 37.53%. This metric provides a measure of the project's profitability relative to the average investment. A higher AAR suggests better financial performance.
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Please help me with 3 examples. Thank you
Discuss the following topics on "injuries caused by machinery accidents and its proposed corrective action"
Injuries caused by machinery accidents and its proposed corrective actionMachinery accidents are a common cause of injuries in the workplace. They can result in severe injuries, including amputations, fractures, cuts, and other types of injuries.
Employers must take action to ensure their workers' safety and prevent accidents from occurring. Some proposed corrective actions for injuries caused by machinery accidents include the following:1. Training: Proper training is essential to prevent injuries caused by machinery accidents. Employees should receive comprehensive training on how to operate machinery safely. The training should include information on the equipment, its hazards, and the proper safety procedures to follow.
Personal protective equipment: Employers must provide employees with appropriate personal protective equipment (PPE) to prevent injuries from machinery accidents. PPE includes safety glasses, earplugs, hard hats, and other equipment to protect workers from hazards.3. Regular maintenance: Regular maintenance of machinery is essential to prevent accidents from occurring. Employers should conduct routine inspections to identify and repair potential hazards. In conclusion, machinery accidents can cause severe injuries, and employers must take steps to prevent them from occurring.
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Within your studies of the new product development process, look at the following mini cases and answer the questions that follow.
Kentucky Grilled Chicken Case
When you're a giant company like Kentucky you can perform new product development process your own stores. Take Kentucky Grilled Chicken for instance. I'm sure it began during an A . They must have said, Hey, what is the trend now? Or maybe it is coming from a consumer or supplier. Either way, the Kentucky Grilled Chicken passed the
B stage which helps spot good ideas and drop poor ones as soon as possible.
Next, came the C , a detailed version of the idea stated in meaningful consumer terms. Then comes the D stage where Kentucky described their target market, the planned value proposition, and the sales, market share, and profit goals. Next step would be performing a E on the Kentucky Grilled Chicken, reviewing sales, costs, and profit projections to see if they fit with the objectives of the company.
Kentucky wouldn't then just commercialize the product to every Kentucky that serves to their target market; they would first have to do F , by introducing the product and marketing program into real market conditions. Here, they would offer the Kentucky Grilled Chicken at certain locations within their target market.
Now answer the following questions:
1. What stages of the new product development process are mentioned in the mini case?
Mini Case New Product development Stage
A B C D E F 2. Answer of the following questions:
A. Mention two of the external sources for ideas? • __________________________________________________________¬¬¬___
• ________________________________________________________________________
B. Explain three reasons for new products to fail. C. Explain the social responsibility related consideration that Kentucky must adhere to when launching the new product. (1 marks)
• • ______________________________________________________
1. The stages of the new product development process mentioned in the mini case are:
A. Idea generation (A)
B. Idea screening (B)
C. Concept development and testing (C)
D. Marketing strategy (D)
E. Business analysis (E)
F. Market Testing (F)
2. The following are the answer to the questions:
A. Two external sources for ideas are: Customer feedback, competitor's product, and market trends.
B. The three reasons why new products fail are as follows: Insufficient market research and analysis, poor product design and quality, and inadequate market promotion.
C. Kentucky must adhere to social responsibility-related considerations when launching a new product by making sure the product does not negatively affect customers' health and safety.
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Payback Period and NPV: Taxes and Straight-Line Depreciation
Assume that United Technologies Corporation is evaluating a proposal to change the company’s manual design system to a computer-aided design (CAD) system. The proposed system is expected to save 12,000 design hours per year; an operating cost savings of $65 per hour. The annual cash expenditures of operating the CAD system are estimated to be $600,000. The CAD system requires an initial investment of $200,000. The estimated life of this system is five years with no salvage value. The tax rate is 21%, and United Technologies uses straight-line depreciation for tax purposes. United Technologies has a cost of capital of 14%.
(a) Compute the annual after-tax cash flows related to the CAD project.
(b) Compute each of the following for the project:
1. Payback period. Round your answer to 2 decimal places.
2. Net present value. (Round answer to the nearest whole number.)
The payback period is approximately 0.32 years and the net present value is approximately $323,842
a) To compute the annual after-tax cash flows related to the CAD project, we need to consider the savings in operating costs, tax implications, and depreciation.
The savings in operating costs can be calculated as:
Savings in operating costs = Design hours saved per year × Cost savings per hour
Savings in operating costs = 12,000 hours/year × $65/hour
Savings in operating costs = $780,000
Next, we calculate the depreciation expense using the straight-line method:
Depreciation expense = Initial investment / Useful life
Depreciation expense = $200,000 / 5 years
Depreciation expense = $40,000 per year
To determine the taxable income, we subtract the depreciation expense from the savings in operating costs:
Taxable income = Savings in operating costs - Depreciation expense
Taxable income = $780,000 - $40,000
Taxable income = $740,000
The tax liability is calculated as:
Tax liability = Tax rate × Taxable income
Tax liability = 0.21 × $740,000
Tax liability = $155,400
Finally, the annual after-tax cash flows can be determined by subtracting the tax liability from the savings in operating costs:
Annual after-tax cash flows = Savings in operating costs - Tax liability
Annual after-tax cash flows = $780,000 - $155,400
Annual after-tax cash flows = $624,600
(b) 1. Payback period:
The payback period is the time it takes for the initial investment to be recovered. To calculate the payback period, we divide the initial investment by the annual after-tax cash flows.
Payback period = Initial investment / Annual after-tax cash flows
Payback period = $200,000 / $624,600
Payback period ≈ 0.32 years (rounded to 2 decimal places)
Net present value (NPV):
The net present value represents the present value of cash inflows minus the present value of cash outflows. To calculate the NPV, we discount the annual after-tax cash flows at the cost of capital of 14% and subtract the initial investment.
NPV = Present value of cash inflows - Present value of cash outflows
NPV = (Annual after-tax cash flows × Present value factor) - Initial investment
Using the formula for the present value factor:
Present value factor = 1 / (1 + Cost of capital)^n
For a 5-year project with a cost of capital of 14%, the present value factor is:
Present value factor = [tex]1 / (1 + 0.14)^5[/tex]
Present value factor ≈ 0.5197
NPV = ($624,600 × 0.5197) - $200,000
NPV ≈ $323,842 (rounded to the nearest whole number)
Therefore, the payback period is approximately 0.32 years and the net present value is approximately $323,842.
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You will be required to draft a persuasive or informative business law speech. Sample topics could include: 1. Why professional athletes are paid too much money and the harm it has on society. 2. Why Universal Health care is unconstitutional and the harm it has on private business. 3. Why Employers are invading an employee's right to privacy when they monitor an employee's activities outside of the workplace. 4. Why corporate CEO's are overpaid and the harm it causes to shareholders and society. I have purposely made the topic very broad to allow the student the opportunity to research and brainstorm a variety of hot topics in business law. Please start researching a topic as soon as possible.
It is important to limit CEO salaries to reasonable amounts based on the performance of the company. These are some of the persuasive or informative business law speech topics that you can choose from.
Business law refers to the branch of law that deals with the legal aspects of businesses and commerce. It governs the establishment, operation, and termination of businesses. Persuasive and informative business law speeches are vital in persuading people to take specific actions or in informing them on certain issues.Sample topics for persuasive or informative business law speeches include:Why professional athletes are paid too much money and the harm it has on society.Why universal health care is unconstitutional and the harm it has on private business.Why employers are invading an employee's right to privacy when they monitor an employee's activities outside of the workplace.
Why corporate CEOs are overpaid, and the harm it causes to shareholders and society.1. Why professional athletes are paid too much money and the harm it has on societyProfessional athletes, especially in popular sports like football and basketball, are paid exorbitant amounts of money. Although some people believe that they deserve the pay due to their talent, there is a need to consider the broader impact on society, particularly on the poor. Professional athletes earn significantly more than the average worker, and this income inequality could contribute to social unrest.2. Why universal health care is unconstitutional and the harm it has on private business.The healthcare system has been a source of debate for many years, particularly regarding the provision of universal health care.
Advocates argue that it is necessary to ensure that everyone has access to health care services. However, others argue that it is unconstitutional and that it harms private businesses by increasing the cost of healthcare. 3. Why employers are invading an employee's right to privacy when they monitor an employee's activities outside of the workplace.Employers have started to monitor their employee's activities outside the workplace through social media platforms, among others. Although it is legal, it can be argued that it invades the employee's right to privacy.
Therefore, employees should have the right to protect their personal information from their employers. 4. Why corporate CEO's are overpaid and the harm it causes to shareholders and society.Corporate CEOs earn exorbitant amounts of money compared to the average worker, which leads to income inequality. This inequality can lead to a decrease in shareholder value due to excessive executive compensation. Therefore, it is important to limit CEO salaries to reasonable amounts based on the performance of the company. These are some of the persuasive or informative business law speech topics that you can choose from.
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The newly incorporated Pet Toy Company (PTC) manufactures multiple products that are sold to a small number of specialty pet stores. One of its product groups is called Boxers. The company uses the weighted average method of process costing.
The following information relates to Boxers during the company's first period of operations:
Period 1 (first period of operations)
Started working on 170 new physical units during the period
Completed and transferred out 150 physical units during the period. These units are ready to be sold to customers.
The physical units in work in progress at the end of the period were 60% complete with respect to conversion costs.
100% of the direct materials are added at the start of the process
Total cost incurred during the period was $175,000 in direct materials and $81,000 in conversion costs
To calculate the equivalent units of production for direct materials and conversion costs, we need to consider the units completed and transferred out, as well as the units in work in progress.
For direct materials:
- The units completed and transferred out are 150.
- The units in work in progress are 170 - 150 = 20.
- Since 100% of the direct materials are added at the start of the process, both the completed units and the units in work in progress are considered 100% complete for direct materials.
Therefore, the equivalent units of production for direct materials is 150 + 20 = 170.
For conversion costs:
- The units completed and transferred out are 150.
- The units in work in progress are 20.
- The units in work in progress are 60% complete with respect to conversion costs.
To calculate the equivalent units of production for conversion costs, we need to multiply the units in work in progress by the percentage of completion:
20 units * 60% = 12 equivalent units.
Therefore, the equivalent units of production for conversion costs is 150 + 12 = 162.
To calculate the cost per equivalent unit, we divide the total cost incurred during the period by the equivalent units of production for each cost category:
- Cost per equivalent unit of direct materials = $175,000 / 170 = $1,029.41
- Cost per equivalent unit of conversion costs = $81,000 / 162 = $500
Finally, to calculate the total cost of units completed and transferred out, we multiply the cost per equivalent unit by the number of units completed and transferred out:
- Cost of units completed and transferred out = $1,029.41 * 150 = $154,411.5 Therefore, the total cost of units completed and transferred out during the first period of operations for Boxers is approximately $154,411.5.
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The current price of a stock is $30, and three-month European call options with a strike price of $32 currently sell for $3. An investor who feels that the price of the stock will increase is trying to decide between buying 100 shares and buying 1,000 call options (10 contracts). Both strategies involve an investment of $3,000. What advice would you give? How high does the stock price have to rise for the option strategy to be more profitable?
The stock price needs to rise to approximately $32.22 for the option strategy to be more profitable.
Based on the given information, the current price of the stock is $30 and the three-month European call options with a strike price of $32 are selling for $3. The investor is considering two strategies: buying 100 shares or buying 1,000 call options (10 contracts), both with an investment of $3,000. To determine which strategy is more profitable, we need to compare the potential gains from each.
Strategy 1: Buying 100 shares: If the stock price increases, the investor will benefit from the price appreciation. The potential gain is calculated as the difference between the selling price and the initial price multiplied by the number of shares. In this case, the potential gain is (selling price - $30) * 100.
Strategy 2: Buying 1,000 call options: If the stock price increases, the investor can exercise the call options and buy the shares at the strike price. The potential gain is the difference between the selling price and the strike price, multiplied by the number of options (10 contracts * 100 shares per contract).
To determine how high the stock price needs to rise for the option strategy to be more profitable, we need to compare the potential gains from both strategies. Equate the potential gains from both strategies and solve for the stock price.
(selling price - $30) * 100 = (selling price - $32) * (10 contracts * 100)
Simplifying the equation, we get: 100 * selling price - 3000 = 1000 * selling price - 32000
Rearranging the terms, we get: 900 * selling price = 29000
Solving for selling price, we find: selling price = 29000 / 900 ≈ $32.22
Therefore, the stock price needs to rise to approximately $32.22 for the option strategy to be more profitable.
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How are the tangency condition and the Lagrange multiplier from
the utility maximization subject to a budget constraint problem, ∗
(p1,p2,) related? Explain your answer
carefully.
The tangency condition and the Lagrange multiplier are closely related in the context of utility maximization subject to a budget constraint.
The tangency condition, also known as the marginal rate of substitution (MRS) equal to the price ratio, states that for a utility-maximizing consumer, the ratio of the marginal utilities of two goods consumed should be equal to the ratio of their prices. Mathematically, it can be represented as MRS = p1/p2, where MRS is the marginal rate of substitution between goods 1 and 2, and p1/p2 is the price ratio.
On the other hand, the Lagrange multiplier is a concept from constrained optimization. In the utility maximization problem subject to a budget constraint, the Lagrange multiplier represents the marginal utility of income. It indicates the rate at which utility changes with respect to a small increase in income, while holding utility constant.
The relationship between the tangency condition and the Lagrange multiplier can be understood by considering the budget constraint. The budget constraint restricts the consumer's consumption choices by imposing a limit on the total expenditure, given the prices of goods and the consumer's income.
When solving the utility maximization problem subject to the budget constraint using Lagrange multipliers, the tangency condition emerges as a necessary condition for an optimal solution. The Lagrange multiplier associated with the budget constraint represents the shadow price of income, which indicates the value of an additional unit of income in terms of utility. At the optimal point, the Lagrange multiplier is equal to the MRS.
In summary, the tangency condition reflects the equality of the marginal utilities and price ratio, indicating the consumer's preference between goods. The Lagrange multiplier, representing the marginal utility of income, is related to the tangency condition as it captures the trade-off between utility and income in the budget constraint problem. Together, these concepts provide insights into the optimal consumption choice and the allocation of resources based on consumer preferences and budget constraints.
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[Great Financial Crisis] Discuss the major factors behind the Great Financial Crisis. Give special emphasis to the transformation of banking from traditional to securitized banking. Gary Gorton states that the 2007 GFC was triggered by a ‘Run on the Repo’. Explain this in your answer. 5. [26 marks] [Electronic Cryptocurrencies] Answer both parts (a) and (b) of this question (a) In his 2009 White Paper, the inventor of Bitcoin, whose pseudonym is Satoshi Nakamoto, presented the case for a private peer-peer digital currency. Explain whether Nakamoto is justified in saying that governments and commercial banks cannot be trusted with the issuance of money. (b) Discuss what is meant by the double spend problem and proof of work in a monetary system. Briefly explain how this is solved in the setting up of a cryptocurrency such as the Bitcoin
The Great Financial Crisis (GFC) of 2007-2008 was a significant global financial crisis that had far-reaching consequences.
1. The transformation of banking from traditional to securitized banking played a major role in the GFC. Securitization involved bundling loans, such as mortgages, into complex financial instruments known as mortgage-backed securities (MBS) and collateralized debt obligations (CDOs).
2. The housing market bubble in the United States was fueled by aggressive lending practices, particularly in the subprime mortgage sector. Financial institutions extended mortgages to borrowers with low creditworthiness, often with adjustable interest rates or minimal down payments.
3. The complexity of securitized products made it challenging to accurately assess their risk exposure. Credit rating agencies played a role in assigning high ratings to these complex securities, leading investors to underestimate the risks involved.
3. Financial institutions heavily relied on borrowed money (leverage) to invest in securitized products, amplifying both potential gains and losses.
The discussion of electronic cryptocurrencies, specifically Bitcoin:
(a) Nakamoto's case for a private peer-to-peer digital currency is centered around the idea that governments and commercial banks cannot be trusted with the issuance of money.
While Nakamoto's concerns are valid to an extent, it's important to note that governments and central banks play critical roles in monetary policy, financial stability, and consumer protection.
(b) The double spend problem refers to the challenge of ensuring that a digital currency cannot be spent more than once. In a digital environment, it is possible to create copies of digital assets, making it difficult to establish ownership and prevent fraudulent activities.
The Great Financial Crisis had multiple contributing factors, including the transformation of banking to securitized banking, subprime mortgage lending, lack of transparency, excessive leverage, and interconnectedness.
Regarding electronic cryptocurrencies, Nakamoto's case for a private peer-to-peer digital currency challenges the trust placed in governments and commercial banks. The double spend problem in digital currencies is addressed through proof of work, a consensus mechanism that ensures the validity of transactions.
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5. You are the new CEO of Dualjet, a u.S. company tha makes premium kitchen stoves for home use. You m decide whether to assemble the stoves in-house or to a Mexican company do it. The fixed and variable costs for each option are as follows: have FIXED COST VARIABLE COST $55,000 $0 S620 Assemble in-house Contract with Mexican assembler a. () Suppose DualJet's premium stoves sell for $2,500. What is the break-even volume point for assembling b. () At what volume level do the two capacity options c· (M) Suppose the expected demand for stoves the stoves in-house? have identical costs? Which capacity option would you prefer, froma perspective?
The Break-even volume = 22 units, Total costs for contracting with Mexican assembler = $620
Hoew to solve for the costsA. Break-even volume point for assembling in-house:
Break-even volume = Fixed costs / (Selling price - Variable cost per unit)
Break-even volume = $55,000 / ($2,500 - $0)
Break-even volume = 22 units
b. Volume level at which the two capacity options have identical costs:
Total costs for assembling in-house = $55,000
Total costs for contracting with Mexican assembler = $620
C. Thhe preference would be to contract with the Mexican assembler due to significantly lower costs.
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Dear Tutor,
I need your kind assistance with these 4 questions.
Your assistance is much appreciated.
7. "A promises to pay B RM10,000 at the end of six months, if C, who owes that sum to B, fails to pay it. B promises to grant time to C accordingly". Advise the lawful consideration of the above. 8. P entered into a 10-year lease of a warehouse. Thereafter, the local authority closed the only street access to the warehouse because of a dangerous building. The street was to be re-opened after the dangerous building was demolished. Discuss whether P could refuse to pay rent and have the contract set aside based on frustration. 9. A, who was a director and secretary of R's co-operative society, bought land at the price of RM900,000 on behalf of R. A knew that the vendor had earlier paid RM450,000 for it but did not inform R accordingly. It turned out that A had received RM150,000 as a benefit from the vendor. Advise R. 10. An offer to contract was made to you by email. You decided to accept that offer and replied by email stating your acceptance. Explain when is the acceptance validly communicated.
The lawful consideration is present in the given scenario, frustration of the lease contract depends on specific circumstances, breaching fiduciary duty may have legal consequences, and the validity of acceptance through email communication may vary based on jurisdiction and contractual provisions.
In the given scenario, the lawful consideration is present as both parties provide something of value in exchange for the promises made. A promises to pay B RM10,000 if C fails to pay the same amount owed to B. This promise is made in exchange for B granting time to C. The consideration is the mutual exchange of promises, which is a fundamental element of a legally binding contract. Therefore, the consideration in this scenario is lawful.
Whether P can refuse to pay rent and have the contract set aside based on frustration depends on the specific circumstances and the terms of the lease agreement. Frustration occurs when an unforeseen event renders the performance of the contract impossible or radically different from what was initially intended. In this case, the closure of the only street access to the warehouse may be considered a frustrating event. However, the impact on P's ability to use the warehouse and the terms of the lease agreement would need to be assessed to determine if frustration applies. If frustration is established, P may have grounds to seek relief or renegotiate the contract.
A, as a director and secretary of R's cooperative society, had a fiduciary duty to act in the best interests of R. By concealing the vendor's earlier purchase price and receiving a personal benefit, A has breached this duty. R should seek legal advice to understand the available remedies for breach of fiduciary duty and determine the appropriate course of action against A. Possible actions could include seeking compensation for any harm suffered or taking legal measures to address the breach and protect R's interests.
In general, acceptance communicated by email is valid when it is received by the offeror. However, the specific validity of acceptance through email communication may be subject to jurisdiction-specific laws and any contractual provisions or requirements set forth in the offer. Parties should be mindful of any prescribed methods of acceptance and consider the timing and content of their email communication to ensure that acceptance is properly communicated and binding. It is advisable to seek legal guidance or refer to applicable laws and contract terms to determine the validity of acceptance through email communication in a given situation.
Therefore, lawful consideration is present in the scenario, the impact of frustration on a lease contract depends on specific circumstances, breaching fiduciary duty may have legal consequences, and the validity of acceptance through email communication may vary based on jurisdiction and contractual provisions. Seeking professional advice and carefully assessing the relevant factors is crucial in making informed decisions in each scenario.
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Mastery Problem: Differential Analysis and Product Pricing
WoolCorp
WoolCorp buys sheep’s wool from farmers. The company began operations in January of this year, and is making decisions on product offerings, pricing, and vendors. The company is also examining its method of assigning overhead to products. You’ve just been hired as a production manager at WoolCorp.
Currently WoolCorp makes three products: (1) raw, clean wool to be used as stuffing or insulation; (2) wool yarn for use in the textile industry, and (3) extra-thick yarn for use in rugs.
Upper management would like your recommendations regarding a production decision regarding their current and proposed product lines.
Continue/Discontinue
For the past year, WoolCorp has experimented with its third product, extra-thick rug yarn. The company wishes to consider whether to continue or discontinue manufacturing and selling this product. You decide to prepare a differential analysis of the income related to all three products. To begin your analysis, you review the following condensed income statement. Then scroll down to complete the differential analysis.
WoolCorp
Condensed Income Statement
For the Year Ended December 31, 20Y8
Raw Wool Wool Yarn Rug Yarn Total Company
Sales $210,000 $155,000 $167,000 $532,000
Costs of goods sold:
Variable costs $(48,000) $(18,600) $(37,160) $(103,760)
Fixed costs (32,000) (12,400) (24,790) (69,190)
Total cost of goods sold $(80,000) $(31,000) $(61,950) $(172,950)
Gross profit $130,000 $124,000 $105,050 $359,050
Operating expenses:
Variable expenses $(5,000) $(7,750) $(53,110) $(65,860)
Fixed expenses (89,000) (78,000) (106,200) (273,200)
Total operating expenses $(94,000) $(85,750) $(159,310) $(339,060)
Operating income (loss) $36,000 $38,250 $(54,260) $19,990
Complete the following table using the data in the preceding income statement to compare the effects of dropping the rug yarn line of products. If required, use a minus sign to indicate a loss.
To compare the effects of dropping the rug yarn line of products, we need to analyze the differential income.
The differential income is the difference in income between two alternatives, in this case, with and without the rug yarn product. We can calculate the differential income by subtracting the income associated with the rug yarn product from the total income of the company.WoolCorpDifferential Analysismarkdown Total Company Without Rug Yarn DifferentialSales $532,000 $_________ $___________Cost of goods sold $(172,950) $_________ $___________Operating expenses $(339,060) $_________ $___________Operating income (loss) $19,990 $_________ $___________To fill in the missing values, we need to subtract the income associated with the rug yarn product from the total company income, cost of goods sold, and operating expenses.Sales:Total Company Sales - Rug Yarn Sales = $532,000 - $167,000 = $________Cost of goods sold:Total Company Cost of Goods Sold - Rug Yarn Cost of Goods Sold = $(172,950) - $(61,950) = $_________Operating expenses:Total Company Operating Expenses - Rug Yarn Operating Expenses = $(339,060) - $(159,310) = $_________Operating income (loss):Total Company Operating Income (Loss) - Rug Yarn Operating Income (Loss) = $19,990 - $(-54,260) = $_________By calculating these values, we can determine the differential income associated with dropping the rug yarn line of products.
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Srior to recording adjusting entries, the Office Supplies account had a $361 debit balance. A physical count of the supplies showed $106 of unusec supplies available. The required adjusting entry is: Multiple Choice Debit Office Supplies Expense $106 and credit Office Supplies $106. Debit Office Supplies Expense \$255 and credit Office Supplies \$255. Debit Office Supplies $106 and credit Office Supplies Expense $106 Debit Office Supplies $106 and credit Supplies Expense $255. Debit Office Supplies \$255 and credit Office Supplies Expense \$255.
The correct answer is: Debit Office Supplies Expense $255 and credit Office Supplies $255.The correct adjusting entry to record the office supplies on hand would be to debit Office Supplies Expense for $255 and credit Office Supplies for $255.
The reason for this is that the Office Supplies account had a debit balance of $361 before the adjustment, indicating that supplies were previously recorded as an asset. However, the physical count revealed that only $106 of unused supplies were available.
To bring the Office Supplies account to its correct balance, an adjusting entry is needed to reduce the asset (Office Supplies) and recognize the expense (Office Supplies Expense) for the supplies used during the period. The entry debits Office Supplies Expense for $255 and credits Office Supplies for $255, reflecting the decrease in supplies and the corresponding expense recognized.
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The correct answer is: Debit Office Supplies Expense $255 and credit Office Supplies $255.The correct adjusting entry to record the office supplies on hand would be to debit Office Supplies Expense for $255 and credit Office Supplies for $255.
The reason for this is that the Office Supplies account had a debit balance of $361 before the adjustment, indicating that supplies were previously recorded as an asset. However, the physical count revealed that only $106 of unused supplies were available.
To bring the Office Supplies account to its correct balance, an adjusting entry is needed to reduce the asset (Office Supplies) and recognize the expense (Office Supplies Expense) for the supplies used during the period. The entry debits Office Supplies Expense for $255 and credits Office Supplies for $255, reflecting the decrease in supplies and the corresponding expense recognized.
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Cullumber Company's account balances at December 31, 2025 for Accounts Receivable and the Allowance for Doubtful Accounts are $900000 debit and $1580 credit. Credit sales during 2025 were $2706000. It is estimated that 2% of accounts receivable will be uncollectible. The adjusting entry to record bad debt expense for 2025 would include a credit to the allowance account for $14840 $16420. $9474 $18000.
The adjusting entry to record bad debt expense for 2025 would include a credit to the allowance account for $18,000.
To calculate the amount of bad debt expense, we first need to determine the estimated uncollectible amount. Given that it is estimated that 2% of accounts receivable will be uncollectible, we can calculate this as follows:
Accounts Receivable * Estimated Uncollectible Percentage
= Bad Debt Expense
[tex]$900,000 * 0.02 = $18,000[/tex]
Since the allowance for doubtful accounts has a credit balance of $1,580 and we need to increase it by $18,000, the adjusting entry should include a credit to the allowance account for $18,000.
Therefore, the correct answer is $18,000.
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Mammoth Industrial is a conglomerate with an optimal capital structure that consists of 40% debt and 60% common equity.Mammoth's marginal tax rate is 40% and it operates the following subsidiaries/divisions Proportion of Optimal Divisional Leveraged Firm's Assets Debt Ratio Beta 60% 30% 1.30 20% 40% 1.10 12% 66.6% 0.90 8% 75% 1.25 Airline Computer Peripherals Electric Utility ConsumerFinance If the risk-free rate is currently 5 percent and the expected return on the market is 12% (i) Compute the firm's cost of equity capital.(hint:you need to calculate the firm's overall beta first,and then use the CAPM [2marks] (ii) If the Airline division can borrow at 12% pre-tax cost,compute the Airline division's cost of capital [3marks] (iii) If the firm decides to increase the size of its Consumer Finance division relative to the other divisions explain the impact on Mammoth's optimal capital structure and its systematic risk [4marks]
The overall beta of Mammoth Industrial is 1.38, and the cost of equity capital using the CAPM is 14.6%. The Airline division's cost of capital is 33.88%. Increasing the size of the Consumer Finance division will raise Mammoth's debt ratio, decrease equity ratio, and increase its systematic risk.
(i) Calculation of the firm's overall beta: Proportion of Optimal Divisional Leveraged Firm's Assets Debt Ratio Beta Proportion of assets financed with debt by Mammoth industrial is 0.4, and proportion of assets financed with equity is 0.6.Hence the leveraged beta of Mammoth industrial is:
Leveraged beta = (1 - 0.4) * 1 + (0.4 * 1.30) * (60 / 40) = 0.6 * 1 + 0.78 = 1.38
Cost of equity capital using the CAPM: CAPM (Capital Asset Pricing Model) formula is:
R E = R F + β E (R M - R F ) where: R E = cost of equity capital, R F = risk-free rate of return,β E = beta of the stock, R M = expected market return. R E = 0.05 + 1.38(0.12 - 0.05) = 0.05 + 0.096 = 0.146 or 14.6%
(ii) Calculation of Airline division's cost of capital: Pre-tax cost of borrowing for Airline division is 12%, and Mammoth's marginal tax rate is 40%. Hence, the after-tax cost of debt for Airline division is 0.12 * (1 - 0.4) = 0.072 or 7.2%
.Airline division's cost of capital = (0.6 * 1.30 * 0.4) + (0.4 * 0.072) = 0.31 + 0.0288 = 0.3388 or 33.88%
(iii) Impact of increasing the size of Consumer Finance division on Mammoth's optimal capital structure and its systematic risk: An increase in the size of Consumer Finance division means that proportion of assets financed with debt will increase, and proportion of assets financed with equity will decrease. This will increase Mammoth's debt ratio and decrease its equity ratio. This, in turn, will increase the overall risk of Mammoth.
Hence, Mammoth's systematic risk will increase as a result of increasing the size of its Consumer Finance division relative to the other divisions.
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Respond to the case study question(s) with complete sentences. Explain your response to the question, incorporating theory, textbook, outside resources, and personal opinions. Provide information from the course material to back up your point of view in 4-6 sentences. 100pts
For each of the following sports products, indicate whether you believe they are discontinuous, dynamically continuous, or continuous innovations: WNBA, titanium golf clubs, and skysurfing.
Continuous innovations involve incremental changes, dynamically continuous innovations bring significant improvements to existing products, and discontinuous innovations introduce completely new and novel offerings.
To determine whether each of the sports products mentioned (WNBA, titanium golf clubs, and skysurfing) can be classified as discontinuous, dynamically continuous, or continuous innovations, we need to consider the characteristics of each type of innovation.
WNBA: The Women's National Basketball Association (WNBA) can be considered a continuous innovation. Continuous innovations are those that involve gradual improvements or advancements in existing products or services. The WNBA builds upon the existing sport of basketball, offering a professional league specifically for women. While it may have introduced some changes and adaptations to accommodate women's participation, the overall concept and rules of the game remain consistent with traditional basketball. This aligns with the definition of a continuous innovation, as it represents an evolutionary rather than a revolutionary change.Titanium Golf Clubs: Titanium golf clubs can be categorized as a dynamically continuous innovation. Dynamically continuous innovations are those that bring significant advancements to existing products or services, offering a noticeable improvement or change. Titanium golf clubs introduced a new material (titanium) for clubhead construction, which resulted in clubs that were lighter, stronger, and allowed for better performance on the golf course. While the basic concept and purpose of golf clubs remained the same, the use of titanium represented a substantial improvement and an evolution in golf club technology.Skysurfing: Skysurfing can be classified as a discontinuous innovation. Discontinuous innovations are those that introduce entirely new products or services that are significantly different from existing offerings. Skysurfing involves combining elements of skydiving and surfing, where individuals perform acrobatic maneuvers while strapped to a board during a freefall. Skysurfing represents a radical departure from traditional sports, combining two distinct activities in a unique and novel way. The introduction of skysurfing created an entirely new sport that did not previously exist, making it a discontinuous innovation.These classifications are based on the characteristics and definitions of discontinuous, dynamically continuous, and continuous innovations. The descriptions provided align with the understanding that continuous innovations involve incremental changes, dynamically continuous innovations bring significant improvements to existing products, and discontinuous innovations introduce completely new and novel offerings.
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27. Refer to Figure 15-7. In order to maximize profits, the
monopolist should charge a price of
a. $9.
b. $12.
c. $20.
d. $23.
28. Refer to Figure 15-7. A profit-maximizing monopolist would
earn profi
27. Option D is correct. In order to maximize profits, the monopolist should charge a price of $23. According to the given graph (Figure 15-7), the point where the marginal revenue curve intersects the marginal cost curve represents the profit-maximizing output level.
Here, the MC (marginal cost) curve intersects the MR (marginal revenue) curve at Q* units of output. The profit-maximizing monopolist should charge a price of $23 per unit of output because, at this output level, the corresponding demand curve (D) intersects the MC curve at a point where the price is $23.28.
28. Option B is correct. A profit-maximizing monopolist would earn a profit of $184 because profit is the difference between total revenue and total cost at the profit-maximizing output level. The graph shows that the revenue is $506, and the cost is $322 at the profit-maximizing output level. Thus, profit = total revenue – total cost = $506 – $322 = $184.
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Selected T-accounts for Jade Mineral Corporation at December 31, 2020, are duplicated below.
Preferred Shares, $6 cumulative
10,000 shares authorized
7,100 shares issued
164,010 Dec. 31/19 Bal.
164,010 Dec. 31/20 Bal.
Common Shares,
50,000 shares authorized
45,000 shares issued
499,500 Dec. 31/19 Bal.
499,500 Dec. 31/20 Bal.
Retained Earnings
117,000 Dec. 31/19 Bal.
? Dec. 31/20 Bal.
Note:
Dividends were not paid during 2018 or 2019. Dividends of $3.90 per common share were declared and paid for the year ended December 31, 2020.
2018 was the first year of operations.
All shares were issued in the first year of operations.
Required:
Using the information provided, answer the following questions.
1. What is the total amount of dividends that the preferred shareholders are entitled to receive per year?
2. Are there any dividends in arrears at December 31, 2019? If yes, calculate the dividends in arrears.
3. Calculate total dividends paid during 2020 to the:
4. During 2020, the company earned profit of $399,000. Calculate the balance in the Retained Earnings account at the end of 2020.
5. Calculate Total Contributed Capital at the end of 2020.
6. Calculate Total Equity at December 31, 2020.
7. How many more preferred shares are available for issue at December 31, 2020?
8. What was the average issue price per share of the preferred shares at December 31, 2020? (Round the final answer to one decimal place.)
1. The total amount of dividends that the preferred shareholders are entitled to receive per year is $42,600 ($6 × 7,100 shares).
2. Dividends in arrears at December 31, 2019 = $0.
There are no dividends in arrears at December 31, 2019.
3. Total dividends paid during 2020 to the common shareholders = $175,500 (45,000 shares × $3.90 per share).
4. Net income of the company during 2020 was $399,000. The balance in the retained earnings account at the end of 2020 was $516,000 ($117,000 + $399,000).
5. Total contributed capital at the end of 2020 = $773,910 ($164,010 preferred shares + $499,500 common shares + $110,400 paid in capital).
6. Total equity at December 31, 2020 = $1,289,410 ($773,910 total contributed capital + $516,000 retained earnings).
7. The remaining preferred shares that are available for issue at December 31, 2020 are 2,900 shares (10,000 authorized shares - 7,100 issued shares).
8. The average issue price per share of the preferred shares at December 31, 2020 was $23.10 ($164,010 ÷ 7,100 shares = $23.10).
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The promotion strategy is often determined based on resources
available before choosing a target segment.
True
False
The given statement "The promotion strategy is often determined based on resources available before choosing a target segment" is False.
The promotion strategy is typically determined based on the target segment and the goals of the marketing campaign, rather than the resources available.
While the available resources may influence the execution and scale of the promotion strategy, the primary focus is on identifying the target segment and developing a strategy that effectively reaches and influences that specific audience.
When developing a promotion strategy, businesses consider various factors, including the target segment, marketing objectives, competitive landscape, and budgetary constraints. While resources play a role in shaping the execution and feasibility of the strategy, they are not the primary determining factor in choosing the target segment.
The target segment is selected based on market research and analysis, taking into account factors such as demographics, psychographics, behavior, and needs of the potential customers. The goal is to identify a specific group of individuals who are most likely to be interested in the product or service being promoted.
Once the target segment is defined, businesses can then develop a promotion strategy tailored to effectively reach and engage that particular audience. This strategy may involve various marketing channels, such as advertising, public relations, social media, content marketing, and more.
The choice of promotional tactics and channels depends on the characteristics of the target segment, the marketing objectives, and the budget allocated for the promotion.
While the resources available do influence the scale and scope of the promotion strategy, businesses often explore creative and cost-effective ways to reach their target audience within their budgetary limitations. They may prioritize certain marketing channels or adjust the messaging and timing of the promotions to make the most efficient use of the available resources.
In summary, while resources do play a role in shaping the execution of the promotion strategy, the primary focus is on selecting the target segment based on market analysis and developing a strategy to effectively reach and engage that audience, rather than determining the promotion strategy based solely on the resources available.
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A monopolist always earns positive economic profits. True False Explain what would happen to the number of firms in the market in the long run if the market price is $10 and a peerfectly competitive firm has an average total cost of $8 ?
False. A monopolist does not always earn positive economic profits in the long run. In a monopoly, there is only one firm in the market with significant control over the supply of a particular product or service.
The monopolist has the ability to set prices and restrict output to maximize its profits. However, the presence of economic profits in the long run depends on various factors such as barriers to entry, market demand, and cost structure. If barriers to entry are high and there are no close substitutes for the monopolist's product, the monopolist may be able to maintain positive economic profits in the long run.
In the scenario described, where a perfectly competitive firm has an average total cost of $8 and the market price is $10, it suggests that the firm is earning a positive economic profit in the short run. However, in a perfectly competitive market, there are no barriers to entry, and new firms can enter the market freely in the long run.
As new firms enter the market attracted by the economic profits, the market supply increases, leading to a downward pressure on prices. Eventually, in the long run, the increased competition will drive prices down to the point where firms earn only normal profits, i.e., zero economic profit. Therefore, in the long run, new firms will enter the market, increasing the number of firms and reducing the economic profits for each individual firm.
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Sunshine Contractors started a contract in January 2020 to build a bridge at a fixed price of $14 million. The bridge was to be completed by October 2022 Total cumulative costs incurred by the end of December 2020 and 2021 were $2 million and $6 million, respectively. Sunshine is unable to estimate the total costs of the project prior to completion. Final costs at the end of the project totaled $11 million. How much cost of sales will Sunshine report in 2022? A. $11,000,000 B. $3,000,000 C. $5,000,000 D. $8,000,000
Sunshine Contractors will report a cost of sales of $3,000,000 in 2022. Option B is correct.
In order to calculate the cost of sales that Sunshine Contractors will report in 2022, we need to understand what is cost of sales. The cost of sales is the cost of the products or services sold by a company. It includes the cost of the materials used, the labor cost, and any other expenses directly related to producing and delivering the product or service to customers.
Sunshine Contractors started a contract in January 2020 to build a bridge at a fixed price of $14 million. The bridge was to be completed by October 2022Total cumulative costs incurred by the end of December 2020 and 2021 were $2 million and $6 million, respectively.
Final costs at the end of the project totaled $11 million.
Now, we can calculate the cost of sales as follows:
Cost of Sales = Final Cost - Cumulative Costs
Total cumulative cost incurred till the end of 2021 = $2 million + $6 million = $8 million
Final cost = $11 million
Cost of Sales = $11 million - $8 million = $3 millionT
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Is the global oil crisis of the last half-century over. write
yes scenario .
Yes, the global oil crisis of the last half-century is over. Over the past few decades, significant developments and changes have occurred in the global oil industry, leading to a more stable and balanced market. Several factors contribute to this positive scenario.
Firstly, advancements in technology and exploration techniques have led to the discovery of new oil reserves and increased extraction efficiency. With the discovery of new oil fields and the ability to tap into unconventional sources such as shale oil, global oil production has significantly expanded. This increased supply has helped alleviate concerns about scarcity and has contributed to a more stable oil market.
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You plan to open an amusement park and I agree to supply the steel for your roller coaster. The agreed delivery date is April 30th. I contact you on April 11 and tell you that due to supply chain issues, the delivery will be late. You need the steel by the agreed delivery date in order to open the amusement park on time. What is the legal term for what has occurred and what are your options?
The legal term for what has occurred in this situation is "anticipatory breach" or "anticipatory repudiation."
When one party to a contract communicates in advance that they will not be able to fulfill their contractual obligations, it is known as an anticipatory breach. In this case, the supplier's notification on April 11 that the delivery will be late constitutes an anticipatory breach because they have indicated their inability to meet the agreed-upon delivery date. As the party relying on the timely delivery of the steel to open the amusement park on schedule, you have several options:
Accept the breach and seek damages: You can accept the supplier's breach and pursue legal remedies, such as claiming compensation for any losses incurred due to the delayed delivery. This could include additional expenses, lost revenue, or reputational harm. Seek specific performance: You can demand that the supplier fulfill their contractual obligation by delivering the steel by the agreed-upon date. This option is suitable if finding an alternative supplier at such short notice would be difficult or impractical. Negotiate a new agreement: You can engage in negotiations with the supplier to modify the terms of the contract. This may involve agreeing on a new delivery date or exploring other solutions that would allow you to open the amusement park on time.
Cancel the contract: If the delayed delivery would significantly impact your plans and the supplier is unable or unwilling to fulfill their obligations within a reasonable timeframe, you may choose to terminate the contract altogether. The best course of action will depend on various factors, including the importance of the steel delivery to your amusement park's opening, the availability of alternative suppliers, and the potential financial and reputational consequences. It is advisable to consult with a legal professional to evaluate your options and determine the most appropriate strategy in this situation.
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The article in WSJ form June 4, 2020 tells that "Yields on the China’s 10-year sovereign bonds, denominated in yuan, this week hit their highest levels since late February at about 2.83%"
Assume that on June 4, 2020 a China’s 10-year sovereign bond has a coupon rate of 4.5( with two coupon payments in a year). What is the price of the bond?
The price of the China's 10-year sovereign bond, with a coupon rate of 4.5% and semi-annual coupon payments, can be calculated using the present value formula for bond pricing. As of June 4, 2020, when the bond's yield was approximately 2.83%, the price of the bond would be approximately 113.05 yuan.
To calculate the price of the bond, we need to discount the future cash flows (coupon payments and the face value) at the bond's yield rate. The formula for the price of a bond is:
Price = C × [1 - (1 + r)^(-n)]/r + F/(1 + r)^n
Where:
C = Coupon payment
r = Yield rate
n = Number of periods
F = Face value
In this case, the bond has a coupon rate of 4.5% and semi-annual coupon payments. Therefore, the coupon payment (C) would be 4.5% of the face value divided by 2. Assuming the face value is 100 yuan, the coupon payment (C) would be 2.25 yuan.
The yield rate (r) mentioned in the article is 2.83%. The bond has a maturity of 10 years, so the number of periods (n) would be 10 multiplied by 2 (since there are two coupon payments per year), resulting in 20 periods. The face value (F) is 100 yuan.
Using these values in the bond pricing formula, we can calculate the price:
Price = 2.25 × [1 - (1 + 0.0283)^(-20)]/0.0283 + 100/(1 + 0.0283)^20
Price ≈ 113.05 yuan
The price of the China's 10-year sovereign bond, with a coupon rate of 4.5% and semi-annual coupon payments, was approximately 113.05 yuan on June 4, 2020, when the yield on the bond reached 2.83%. Bond prices are inversely related to yields, meaning that as yields increase, bond prices decrease
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Where’s the leadership?
At Oman Agriventures Inc., senior management announced a restructuring/reorganization plan every January, with a target completion date of June. The reorganization directives mentioned strategic objectives and the competitive environment, but this changed very little from year to year. There were no announcements from leadership on what was to be accomplished by reorganization, nor were any process changes explained. In addition, there was no effort to get the workforce involved in new initiatives. At the end of the day, nothing ever changed from these reorganizations – just a shuffling of managers and departments to justify reducing staff. First-line managers, middle managers, and junior executives throughout the company spent the year dreading the reorganization, sweating through the process and wondering if this was the year their job was to be eliminated, and then being thankful that they were spared for one more year. The economy was down, so it was difficult to leave and take a job elsewhere. Except for a few critical positions, there was little training or management development for those employees with new responsibilities. Customers were often confused and frustrated by having to deal with a succession of new or "re-shuffled" contact people each year.
At Muscat Farms, Ltd. one department was asked by senior leadership to develop action plans and projects needed to launch a new product. The department manager took the initiative to implement a transformational changed and appointed a lead team consisting of her section managers and a few key subject-matter experts. As the employees became more inspired by the thoughts and ideas surrounding the transformation, the lead team became aware that their power base was going to disappear if the changes were actually implemented, especially if employees were empowered to recommend changes and make some decisions on their own. The lead team decided implicitly and explicitly not to allow any significant changes to occur. After four months of anticipation by supervisors and employees, the lead team just declared the transformation finished and went back to business as usual. This was frustrating and demoralizing to the employees.
(case adapted from Evans and Lindsay, Managing for Quality and Performance Excellence, 10 ed, . p.660)
Question:
1. Discuss how the leadership failed to foster change in order to create a sustainable organizational structure and environment at Oman Agriventures, Inc.?
2. What aspects of effective leadership were ignored at Muscat Farms, Ltd? What actions should the leadership of these two companies have taken?
At Oman Agriventures, Inc., leadership failed to communicate and involve employees in meaningful changes, resulting in confusion and demotivation. At Muscat Farms, Ltd., leadership ignored employee empowerment and engagement, causing frustration and hindering successful transformation.
1) The leadership at Oman Agriventures, Inc. failed to foster change and create a sustainable organizational structure and environment in several ways. Firstly, there was a lack of clear communication and vision from leadership regarding the purpose and objectives of the reorganizations. This led to confusion and demotivation among employees, as they were unsure of what was to be accomplished.
Additionally, there was no effort to involve the workforce in new initiatives or seek their input, which resulted in a disengaged and skeptical employee base. Furthermore, the reorganizations seemed to focus more on reducing staff rather than implementing meaningful process changes or providing adequate training and development opportunities for employees. This lack of strategic focus and employee involvement created a culture of fear and uncertainty, hindering any potential for sustainable change.
2) At Muscat Farms, Ltd., the leadership failed to exhibit effective leadership practices in several ways. Firstly, they did not empower or involve employees in the transformation process. The leadership team took control and prevented significant changes from occurring, which demoralized and frustrated the employees who were initially inspired by the transformation.
Effective leadership involves empowering employees, fostering a culture of collaboration and participation, and allowing them to contribute their ideas and recommendations. In this case, the leadership ignored these aspects, causing a lack of ownership and engagement among employees.
The leadership of both companies should have taken several actions to foster change and create a sustainable organizational structure. They should have clearly communicated the purpose and objectives of the changes, providing a compelling vision that employees could align with. They should have involved employees in the decision-making process, seeking their input and ideas for improvement.
Additionally, providing adequate training and development opportunities for employees would have helped them adapt to new responsibilities and contribute more effectively. Furthermore, leadership should have exhibited transparency and consistency in their actions, building trust among employees. By fostering a culture of collaboration, empowerment, and continuous improvement, sustainable change could have been achieved in both organizations.
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