15.2 Calculating Flotation Costs: The Wiley Oakley Co. has just gone public. Under a firm commitment agreement, Wiley received $21.39 for each of the 7.75 million shares sold. The initial offering price was $23 per share, and the stock rose to $26.30 per share in the first few minutes of trading. Wiley paid $1,350,000 in legal and other direct costs and $210,000 in indirect costs. What was the flotation cost as a percentage of funds raised

Answers

Answer 1

Answer:

23.16%

Explanation:

net amount of money received by Wliey Oakley = 7,750,000 stocks x $21.39 per stock = $165,772,500

total flotation costs including direct and indirect costs = [($26.30 - $21.39) x 7,500,000] + $1,350,000 + $210,000 = $38,385,000

flotation costs as a percentage of funds raised = $38,385,000 / $165,772,500 = 0.2316 = 23.16%


Related Questions

Gallonte Inc. began operations in April of this year. It makes all sales on account, subject to the following collection pattern: 30% are collected in the month of sale; 60% are collected in the first month after sale; and 10% are collected in the second month after sale. If sales for April, May, and June were $60,000, $80,000, and $70,000, respectively, what were the firm's budgeted collections for May

Answers

Answer:

Total cash collection May= $60,000

Explanation:

Giving the following information:

Cash collection:

30% are collected in the month of sale

60% are collected in the first month after sale

10% are collected in the second month after sale.

Sales:

April= $60,000

May= $80,000

We need to calculate the cash collection for May:

Cash collection:

Sales in cash May= (80,000*0.3)= 24,000

Sales in account from April= (60,000*0.6)= 36,000

Total cash collection May= $60,000

On January 1, two years ago, Parkway Corporation purchased all of the outstanding common stock of Shaw Company for $220,000 cash. On that date, Shaw's net assets had a book value of $148,000. Equipment with an 8-year life was undervalued by $20,000 in Shaw's financial records. Shaw has a database that is valued at $52,000 and will be amortized over ten years. Shaw reported net income of $25,000 in the year of acquisition and $32,500 in the following year. Dividends of $2,500 were declared and paid in each of those two years.
The third year of operations is now complete. For each of the two companies, selected account balances as of December 31 for this third year are as follows: Park way ShawRevenues 250,000 142,500Expenses 175,000 100,000 Equipment 125,000 60,000 Retained earnings, begining of the year 150,000 75,000Dividend paid 25,000 5,000What is consolidated net income for the third year of operations if the parent company uses the partial equity method?
A) $109,800
B) $112,000
C) $115,000
D) $117,500
E) $113,500

Answers

Answer:

A) $109,800

Explanation:

The computation of the consolidated net income using the partial equity method is as follows;

= Park way revenue + Shaw revenue - part way expenses - shaw expenses - dividend declared - amortization expenses

= $25,0000 + $142,500 - $175,000 - $100,000 - $2,500 - ($52,000 ÷ 10 years)

= $109,800

Hence, the correct option is A.

Mentor Corp. has provided the following information for the current year: Units produced 3,500units Sale price$200per unit Direct materials$70per unit Direct labor$55per unit Variable manufacturing overhead$20per unit Fixed manufacturing overhead$350,000per year Variable selling and administrative costs$30per unit Fixed selling and administrative costs$150,000per year Calculate the unit product cost using variable costing.

Answers

Answer:

the unit product cost using variable costing is $145 per unit

Explanation:

The computation of the unit product cost using variable costing is as follows:

= Direct materials per unit +  direct labor per unit + variable overhead per unit

= $70 + $55 + $20

= $145 per unit

Hence the unit product cost using variable costing is $145 per unit

We simply applied the above formula so that the correct value could come

And, the same is to be considered

Identify the impact on either the supply or demand of loanable funds following the events listed below. Economic conditions deteriorate, prompting households to save a larger portion of their income. will In an effort to balance the budget, the government increases taxes paid by businesses. will Economic conditions improve, increasing the demand for goods and services. will Innovations in robotics technology vastly improves productivity within manufacturing firms. will

Answers

Answer:

1. Economic conditions deteriorate, prompting households to save a larger portion of their income. SUPPLY will INCREASE.

Loanable funds are created by financial institutions from the savings that households deposit in them. If households start saving more, the amount of loanable funds created will be more which means an increase in supply.

2. In an effort to balance the budget, the government increases taxes paid by businesses. DEMAND will DECREASE.

Businesses comprise a large portion of the market demanding loanable funds. If their taxes increase, they will reduce the loanable funds they get which they use for investment because they will not see the need of investing more if their profitability will suffer from taxation.

3. Economic conditions improve, increasing the demand for goods and services. DEMAND will INCREASE.

With goods and services in high demand, businesses will seek more loanable funds to expand their capacity and produce more goods and services.

4. Innovations in robotics technology vastly improves productivity within manufacturing firms. DEMAND will INCREASE.

Demand for loanable funds will increase as businesses invest in the innovations to take advantage of the improved productivity offered by them.

The impact of the demand and supply in the given situations would be as follows:

1). Increase in Supply

2). Decrease in Demand

3). Increase in Demand

4). Increase in Demand

Demand and Supply

Demand and Supply are affected by various factors including price, income, and many others.

The fall in the economic conditions and people promoting savings would cause an increase in supply because the demand would decrease due to emphasis on savings.

The increased taxation would cause the purchasing power of the people to fall and thus, the demand would decrease.

The improvement in economic conditions implies more purchasing powers and hence, the demand will increase.

The enhanced productivity increases employment and hence, more will be demanded.

Learn more about "Demand" here:

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ABC Company has completed the basic format to be used in preparing the statement of cash flows (indirect method). Listed below in random order are line items to be included in the statement of cash flows.
Purchase of equipment $2,210
Decrease in inventory 253
Increase in prepaid rent 75
Payment of dividends 360
Depreciation expense 184
Increase in accounts receivable 530
Increase in accounts payable 160
Gain on sale of land 136
Net income 1,878
Repayment of notes payable 493
Cash received from the sale of land 67
Issuance of common stock 2,440
Required:
1. What is the net cash provided by operating activities?
a. $926 Inflow.
b. $1,198 Inflow.
c. $420 Inflow.
d. $324 Inflow.
2. What is the net cash provided by Investing activities?
a. $2,143 outflow.
b. $2,279 outflow.
c. $1,959 outflow.
d. $2,095 outflow.
3. What is the net cash flow by financing activities?
a. $1,587 Inflow.
b. $1.947 Inflow.
c. $2,080 Inflow.
d. $2,440 Inflow.

Answers

Answer:

1. b. $1,198 Inflow

2. a. $2,143 outflow

3. a. $1,587 Inflow.

Explanation:

Determination of net cash provided by operating activities

                                                          $

Cash flow from Operating Activities

Net income                                                        1,878

Adjust for :

Depreciation expense                                        184

Decrease in inventory                                        253

Increase in prepaid rent                                     (75)

Increase in accounts receivable                      (530)

Increase in accounts payable                            160

Gain on sale of land                                          (136)

Net cash provided by operating activities      1,734

Determination of net cash provided by Investing activities

                                                                   $

Cash flow from Investing Activities

Purchase of equipment                             (2,210)

Cash received from the sale of land              67

Net cash provided by Investing activities (2,143)

Determination of net cash flow by financing activities

                                                                     $

Cash flow from Financing Activities

Payment of dividends                              (360)

Issuance of common stock                    2,440

Repayment of notes payable                  (493)

Net cash flow by financing activities      1,587

who want to do 1v1 lol with me

Answers

On what lol ? I’m curious but yeah sure

Answer:

nnm,v xcmnm,bkljmbihutjhuF

Explanation:

After the introductory period, all consumers who have this Platinum Card will...

Answers

Answer:

Qualify for an A.P.R. based on their creditworthiness

Explanation:

After the introductory period is over you will be set a new APR

Financial services Consumers, who have Platinum Card after some introductory period, qualify for APR (Annual Percentage Rates).

The qualification for APR depends on the customer's creditworthiness.  This is the assessed financial ability of a customer to pay on her credit terms.  If the credit performance of the customer is adjudged worthy, the cardholder may be given a Titanium card with a higher credit limit.

When a credit card account is opened for a customer, the customer is charged with the introductory rate.  Then, after the introductory period, the customers are charged with the APR, which is usually less than the introductory rate.

Credit card account holders may also attract penalty APR when the penalty terms are triggered.   Some credit card accounts attract variable APR, which means that the rate changes depending on stated circumstances.

Thus, the rate charged at the introductory period of a Platinum Card is higher than the APR.

Learn more about Annual Percentage Rates at https://brainly.com/question/23806178

Ivanhoe Corporation, a manufacturer of Mexican foods, contracted in 2020 to purchase 1000 pounds of a spice mixture at $4.00 per pound, delivery to be made in spring of 2021. By 12/31/20, the price per pound of the spice mixture had dropped to $3.70 per pound. In 2020, Ivanhoe should recognize:______________

Answers

LAnswer:

Loss of $300

Explanation:

Calculation for the what Ivanhoe should recognize in 2020

2020 Recognized Amount=(1,000 pound*$4.00 per pound)-(1,000 pound*$3.70 per pound)

2020 Recognized Amount=4,000 pound-3,700 pound

2020 Recognized Amount=300 pound

Therefore what Ivanhoe should recognize in 2020 is LOSS of 300 pound

The journal entry to record the use of utilities in a factory could include which two of the following: (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
Debit to Factory Overhead
Credit to Factory Overhead
Debit to Factory Utilities Payable
Credit to Factory Utilities Payable
Credit to Raw Materials
Credit to Factory Wages Payable

Answers

Answer:

Debit to Factory Overhead

Credit to Factory Utilities Payable

Explanation:

The journal entry to record the use of utilities in a factory is as follows:

Factory overhead Dr XXXXX

         To Factory utilities payable XXXXX

(Being the utilities usage is recorded)

Here the factory overhead is debited as it increased the expenses and credited the factory utilities payable as it also increased the liabilities

So, the above represent the answer

8-4 Valuing Commercial Real Estate BuildingOne Properties is a limited partnership formed with the express purpose of investing in commercial real estate. The firm is currently considering the acquisition of an office building that we refer to simply as building B. Building B is very similar to building A, which recently sold for $36,960,000. BuildingOne has gathered general information about the two buildings, including valuation information for building A:

Answers

Answer:

the question is incomplete:

Buildings A and B are similar in size (80,000 and 90,000 square feet, respectively). However, the two buildings differ both in maintenance costs ($23 and $30 per square foot) and rental rates ($100 versus $120 per square foot). At this point, we do not know why these differences exist. Nonetheless, the differences are real and should somehow be accounted for in the analysis of the value of building B using data based on the sale of building A. Building A sold for $462 per square foot, or $36,960,000. This reflects a sales multiple of six times the building’s net operating income (NOI) of $6,160,000 per year and a capitalization rate of 16.67%.

NOI of building A = ($100 x 80,000 ft²) - ($23 x 80,000 ft²) = $6,160,000

NOI of building B = ($120 x 90,000 ft²) - ($30 x 90,000 ft²) = $8,100,000

building B's market value = NOI / capitalization rate = $8,100,000 / 0.1667 = $48,600,000

property value = $48,600,000 / 90,000 ft² = $540 per ft²

Using your accounting knowledge, fill in the following separate income statements a through e. Identify any negative amount by putting it in parentheses.
Statements:
a b c d e
Sales $100,000 $805,000 $2,000 $450,000 $100,000
Cost of goods sold
Merchandise inventory (beginning) $10,000 $0 $100 $80,000 $25,000
Total Cost of merchandise purchases $30,000 $300,000 $0 $100,000 $10,000
Merchandise inventory (ending) ($10,000) $10,000 ($10) ($50,000) ($10,000)
Cost of goods sold $30,000 $290,000 $90 $130,000 $25,000
Gross Profit $70,000 $515,000 $1,910 $320,000 $75,000
Expenses $10,000 $150,000 $1,000 $400,000 $50,000
Net Income (loss) $60,000 $365,000 $910 ($80,000) $25,000

Answers

Answer:

Income Statements           a             b                c                d                 e

Sales                         $100,000   $805,000  $2,000   $450,000  $100,000  

Cost of goods sold  ($30,000)  ($290,000)     ($90)  ($130,000) ($25,000)

Gross Profit               $70,000     $515,000    $1,910   $320,000   $75,000

Expenses                  ($10,000)   ($150,000) ($1,000) ($400,000) ($50,000)

Net Income (loss)     $60,000    $365,000       $910    ($80,000)   $25,000

Explanation:

a) Data and Calculations:

Income Statements             a           b                 c                  d                 e

Sales                            $100,000  $805,000  $2,000  $450,000  $100,000

Cost of goods sold

Merchandise inventory

(beginning)                  $10,000     $0               $100     $80,000   $25,000

Purchases                   $30,000   $300,000     $0       $100,000    $10,000

inventory (ending)      ($10,000)    ($10,000)   ($10)     ($50,000)  ($10,000)

Cost of goods sold     $30,000   $290,000      $90    $130,000   $25,000

Gross Profit                 $70,000    $515,000  $1,910    $320,000   $75,000

Expenses                     $10,000    $150,000  $1,000   $400,000   $50,000

Net Income (loss)       $60,000   $365,000     $910    ($80,000)  $25,000

Select the correct answer.
Information security professionals hack into computer systems.
A True
B. False

Answers

Answer:

true

Explanation:

Answer:

false

Explanation:

Zycon has produced 10,000 units of partially finished Product A. These units cost $15,000 to produce, and they can be sold to another manufacturer for $20,000. Instead, Zycon can process the units further and produce finished Products X, Y, and Z. Processing further will cost an additional $22,000 and will yield total revenues of $35,000. Identify whether the item is relevant or irrelevant to the sell or process further decision.

Answers

Answer:

Cost relevant or irrelevant for decision making to sell or process further

a. $15,000 already incurred is not relevant because this is sunk cost. This cannot be avoided or changed.

b. $20,000 selling price is relevant for decision making because this incremental revenue is generated if goods are sold semi-finished.

c. $22,000 additional selling price is for decision making because this cost is required for further processing and shall be incurred.

d. $35,000 revenue from processing is relevant for decision making because this incremental revenue is generated if goods are after further processing.

Dan Pink argues that for 21st century tasks in creative businesses the mechanistic, reward-and-punishment approach will not work best because creativity is often constrained when immediate monetary rewards are offered in return for success. a. Trueb. False

Answers

Answer: True

Explanation:

This statement is true. Dan Pink argued that when it came to creative businesses, it would be best to use intrinsic as opposed to extrinsic rewards to encourage employees as extrinsic rewards such as money could constrain creativity.

Intrinsic rewards are those that are psychologically rewarding such as giving employees tasks that are fulfilling and make them feel part of the team as well as positive feedback from employers.

A company had a beginning balance in retained earnings of $43,300. It had net income of $6,300 and declared and paid cash dividends of $5,700 in the current period. The ending balance in retained earnings equals:

Answers

Ending balance is $43,900. You take the beginning balance of RE, add net income (or subtract net loss) then subtract any dividends paid.

Corporation produces shiny discs. A special order has been placed by the customer for 2,200 units of the shiny disc for $27 a unit. While the disc would be modified slightly for the special order, the normal unit product cost for each disc is $20.50:
Direct materials $ 5.80
Direct labor 4.00
Variable manufacturing overhead 2.90
Fixed manufacturing overhead 7.80
Unit product cost $ 20.50
Assume that direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs.The customer would like modifications made to each disc that would increase the variable costs by $1.90 per unit and that would require an investment of $16,000 in special equipment that would have no salvage value.This special order would have no effect on Rick Corp.'s other sales. The company has enough spare capacity for producing the special order.What would be the annual financial advantage (disadvantage) for Rick as a result of accepting this special order?a. $40,760b. ($15,700)c. ($2,000)d. $16,200

Answers

Answer:

Effect on income= $11,280 increase

Explanation:

Giving the following information:

A special order has been placed by the customer for 2,200 units of the shiny disc for $27 a unit.

Because it is a special order, we will take into account only the differential fixed costs.

First, we need to calculate the total unitary cost and differential fixed costs:

Total unitary variable cost= 5.80 + 4 + 2.9 + 1.9

Total unitary variable cost= $14.6

Total fixed cost= $16,000

Now, we can determine the effect on income:

Effect on income= 2,200*(27 - 14.6) - 16,000

Effect on income= $11,280 increase

koshys coffe in bagalore is quaint establishment nesteld near mg road in the central business distirct it serves coffee and fruit cake to a clientel that has been enjoying these products for over fifty years the demand for coffee beans is 6600 cases per year each case has 24 ten pound bags it would be distraus fro them to run out of coffe so tye keep a safety stock of 30 cases the cases cost 4800 and it costs 5 per case to order coffee. as coffee is perishable prudct the holding ocst is fairly hight 40/case/year the lead time to recive an order is seven days koshys is open 300 days a year.
What is their annual ordering cost if they order at their EOQ level?

Answers

Answer:

812.41

Explanation:

Demand D = 6600 cases

Ordering cost S = 5

Holding cost H= $40

Economic order quantity = EOQ

Q = [tex]\sqrt{2DS/H}[/tex]

Q = [tex]\sqrt{(2*6600*5)/40}[/tex]

Q = [tex]\sqrt{1650}[/tex]

Q = 40.620192

Q = 40.62 cases

Annual ordering cost = D * S / EDQ

Annual ordering cost = 6600 * 5 / 40.62

Annual ordering cost = 33000 / 40.62

Annual ordering cost = 812.4076809453471

Annual ordering cost = $812.41

So, their annual ordering cost if they order at their EOQ level is 812.41

Peter has just paid $100 for a comic book, not because he thinks it is worth $100 or because he likes comic books, but because he thinks he can sell it for $200 next month. Peter is:

Answers

Answer:

investing

Explanation:

buying somthing to sell later because of the profit

This company purchased a truck at a cost of $12,000. The truck has an estimated residual value of $2,000 and an estimated life of 5 years, or 100,000 hours of operation. The truck was purchased on January 1, 2012, and was used 27,000 hours in 2012 and 26,000 hours in 2013. Refer to Fabian Woodworks. If the company uses the units-of-production method, what is the depreciation rate per hour for the equipment

Answers

Answer:

The correct answer is $0.10 per hour

Explanation:

According to the scenario, the calculation of the depreciation rate per hour using the units-of-production method is as follows

= (Purchase cost - estimated residual value) ÷ (estimated hours of operation)

= ($12,000 - $2,000) ÷ (100,000 hours)

= ($10,000) ÷ (100,000 hours)

= $0.10

hence, the depreciation rate per hour for the equipment is $0.10

Suppose your company needs $43 million to build a new assembly line. Your target debt-equity ratio is .65. The flotation cost for new equity is 6 percent and the flotation cost for debt is 2 percent. Your boss has decided to fund the project by borrowing money because the flotation costs are lower and the needed funds are relatively small. a. What do you think about the rationale behind borrowing the entire amount?

Answers

Answer: See explanation

Explanation:

Debt = 0.65

Weight = 39.39%

Cost for debt = 2%

Product = 39.39% × 2%

= 0.3939 × 0.02

= 0.007878

Equity = 1.00

Weight = 60.61%

Cost for equity = 6%

Product = 60.61% × 6%

= 0.6061 × 0.06

= 0.036366

Weighted average floatation cost:

= 0.007878 + 0.036366

= 0.044244

= 4.42%

The true cost of the building will then be:

= Funds needed / (1 - Floatation cost)

= $43,000,000 / (1 - 0.044244)

= $43,000,000 / 0.955756

= $44,990,562


What are the step(s) when using the Sales with Payment customer
workflow?

Answers

Answer:

Option (d) is correct

Explanation:

Create Invoice > Receive Payment deposited to the Undeposited Funds account > Create Bank Deposit.

Hope this provides to your accomplishment. Hit Same to stimulates the specialists to provide characteristic explications.

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A notary signing agent has been providing signing services with no incidents for over 10 years without undergone a background screning . Therefore. he or she

Answers

Answer:

Explanation:

Notary

A falling price level is a symptom of an unhealthy economy, if prices have fallen due to _________. It is symptom of a healthy economy if prices have fallen due to _________

Answers

Answer:

A decrease in the demand for goods and services; an increase in the supply of goods and services.

Explanation:

In the case of the unhealthy economy, if the price is fall so it is because of reduction in the demand of the products and services while on the other hand if there is a healthy economy and now the price is fallen so it is because of the supply of the goods and services are rised up.

Therefore the last option is correct

And, the rest of the options are incorrect

On January 1, 2019, Sandhill Corporation acquired machinery at a cost of $1290000. Sandhill adopted the double-declining balance method of depreciation for this machinery and had been recording depreciation over an estimated useful life of ten years, with no residual value. At the beginning of 2022, a decision was made to change to the straight-line method of depreciation for the machinery. The depreciation expense for 2022 would be

Answers

Answer:

$94,354.29

Explanation:

Depreciation rate = 100/10*2 = 20%

2019 Depreciation = 1290000 * 20% = $258000

2020 Depreciation = 1290000 * 80% * 20% = $206400

2021 Depreciation = 1290000 * 80% * 80% * 20% = $165120

Accumulated depreciation (2019 to 2021) = $258000 + $206400 + $165120 = $629,520

Depreciation expense for 2022 = (1290000 - 629,520) / 7

Depreciation expense for 2022 = 660480 / 7

Depreciation expense for 2022 = $94,354.29

Jeff and Riley were married for 35 years when Riley died in July of 2016. The couple have two children who are 6 and 10 years old. Which of the following applies to Jeff regarding filing status?a) Jeff can file using any status he wants for the next 3 yearsb) Since Jeff’s spouse died during the year, he may be entitled to the special qualifying widower with dependent child benefits for tax year 2017 and 2018c) Since Jeff’s spouse died during the year, he may be entitled to the special qualifying widower with dependent child benefits for tax year 2016 onlyd) Since Jeff’s spouse died during the year, he may be entitled to the special qualifying widower with dependent child benefits for tax year 2017 only

Answers

Answer:

(D) I think

Explanation:

When your husband or spouse dies,you file as a widower. If he has children he could get extra benefits because he can file his kids as a Dependent on his Taxes.

Hope this helps:)!

Stay beautiful ❤️

With Riley having died in 2016, the procedure would be that b) Since Jeff’s spouse died during the year, he may be entitled to the special qualifying widower with dependent child benefits for tax year 2017 and 2018.

Special Qualifying WidowerAllows a widower to still fill taxes jointly as a married person for two years after the spouse dies. Can only apply if there is at least a single dependent child.

There are two dependent children in this scenario so Jeff qualifies for this filling status. As Riley died in 2016, Jeff's two years would be the years 2017 and 2018.

In conclusion, option B is correct.

Find out more on the special qualifying widower status at https://brainly.com/question/26021534.

ABC Inc.'s capital structure is 40% debt, 15% preferred, and 45% common equity, and its tax rate is 40%. For financing, (a) ABC sold a non-callable bond several years ago that now has 15 years to maturity with 8% annual coupon, paid semiannually, at a price of $1,065, and a par value of $1,000. (b) ABC sold a perpetual preferred stock for $95.50 per share, with a $7.50 annual dividend and a flotation cost of 3.00% of the price. (c) ABC also has beta

Answers

Answer:

The answer is B (im pretty sure)

Hope this helps plz consider marking brainliest

Explanation:

Assume that Clark Electronics has a monopoly in the production and sale of a new device for detecting and destroying a computer virus. Clark Electronics currently incurs short-run losses, but it continues to operate.
a. What must be true for Clark to continue to operate in the short run?
b. Draw a correctly labeled graph, and show each of the following for Clark.
i. The profit-maximizing price and output
ii. Area of loss
C. Assume Clark is maximizing profit. What will happen to its total revenue if Clark raises its price? Explain.
d. If demand for the new device increases, explain what will happen to each of the following in the short run.
i. Profit-maximizing output
ii. Total cost

Answers

Solution :

c. MC=MR is the profit maximizing equilibrium point. The price rise beyond that is likely to raise the total revenue. But the total cost might increase equally or more then that to nullify or decrease the profit.

d. (i). The demand increase implies that the AR (demand) curve shifts rightwards. This will increase the equilibrium price.

(ii). Change in demand does not affect the total cost.

a. Monopoly might continue to produce in short earn even if its AR < AC. It continues to do so until shut down point. It refers that production continued until average revenue (AR) is greater than equal to the average variable cost (AVC). The monopoly is a market with a single seller.

This market's average revenue (AR) demand curve is above its marginal curve . The curves are downward sloping, illustrating price demand inverse relationship.

Equilibrium quantity : when the marginal revenue = marginal cost

Equilibrium price : equilibrium quantity corresponding price at AR (demand ) curve.

 

During August, Boxer Company sells $360,000 in merchandise that has a one-year warranty. Experience shows that warranty expenses average about 4% of the selling price. The warranty liability account has a credit balance of $12,400 before adjustment. Customers returned merchandise for warranty repairs during the month that used $9,000 in parts for repairs. The entry to record the estimated warranty expense for the month is:

Answers

Answer:

Debit Estimated Warranty Liability $12,400

Credit Warranty Expense $12,400

Explanation:

Warranty Expense = 0.04 * Total Sales

Warranty Expense = 0.04 * $360,000

Warranty Expense = $14,400

Warranty Liability Account = Warranty Expense + Opening balance of the Warranty liability Account

Warranty Liability Account = $14,400 + $12,400

Warranty Liability Account = $26,800

The business would incur actual warranty expense of $12,400.

Debit Estimated Warranty Liability $12,400

Credit Warranty Expense $12,400

3. Hayden Company currently sells widgets for $160 per unit. The variable cost is $60 per unit and total fixed costs equal $240,000 per year. Sales are currently 40,000 units annually, and the income tax rate is 40 percent. Required: a. Calculate the contribution margin per unit.

Answers

Answer:

The contribution margin per unit is $100

Explanation:

The computation of the contribution margin per unit is shown below:

The Contribution margin per unit is

= Selling price per unit - variable cost per unit

= $160 - $60

= $100

hence, the contribution margin per unit is $100

We simply applied the above formula so that the correct value could come

And, the same is to be considered

A payroll tax is collected by which of the following methods?
A.
It is automatically deducted as a percentage of the paycheck.
B.
The paycheck is brought to the bank for the tax to be deducted.
C.
The payroll tax is paid with the income tax on April 15 of each year.
D.
The government deducts a percentage of your paycheck directly from your personal bank account.


Please select the best answer from the choices provided

A
B
C
D

Answers

A. It’s automatically deducted as a % of the paycheck. This is based on the assumption you are not a contracted employee receiving a 1099 tax form.

Answer:

A.

It is automatically deducted as a percentage of the paycheck.

Explanation:

just did it on the exam

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