Answer:
$-675,000
Explanation:
here is the full question
Suppose a farmer in Georgia begins to grow peaches. He uses$1,000,000 in savings to purchase land, he rents equipment for$80,000 a year, and he pays workers $130,000 in wages. Inreturn, he produces 200,000 baskets of peaches per year, which sell for $3.00 each. Suppose the interest rate on savings is 3 percent and that the farmer could otherwise have earned $35,000 as a shoe salesman.
Economic profit = accounting profit - implicit cost
Accounting profit= total revenue - explicit cost
Implicit cost is the cost of the next best option forgone when one alternative is chosen over other alternatives
Explicit cost includes the amount expended in running the business. They include rent , salary and cost of raw materials
total explicit cost = (1,000,000 + $80,000 + $130,000) = $1,210,000
total revenue = price x output
$3 x 200,000 = $600,000
Accounting profit = $600,000 - $1,210,000 = $-610,000
implicit cost = amount he could have earned working as a sales man = $35,000
Interest on loan = 0.03 x 1,00,000 = 30,000
total = 35,000 + 30,000 = 65,000
economic profit = $-610,000 - 65,000 = $-675,000
The peach farmer earns economic profit of $
Mio was transferred from New York to Germany. He lived and worked in Germany for 340 days in 2020. Mio's salary for 2020 is $190,000. Assume a 366-day year. In your computation, round any division to four decimal places before converting to a percentage. For example, 0.473938 would be rounded to 0.4739 and converted to 47.39%. If required, round your final answer to the nearest dollar. What is Mio's foreign earned income exclusion
Answer:
Mio's foreign earned income exclusion is $99,960
Explanation:
The calculation of the Mio's foreign earned income exclusion is given below:
The foreign earned income exclusion limit for 2020 is $107,600
Now the foreign earned income exclusion depend on days equivalent to
= Foreign earned income exclusion limit × (2020 days ÷ total number of days in a year)
= $107,600 × (340 days ÷ 366 days)
= $99,960
Hence, Mio's foreign earned income exclusion is $99,960
Carr Corporation retires its $100,000 face value bonds at 105 on January 1, following the payment of interest. The carrying value of the bonds at the redemption date is $103,745. The entry to record the redemption will include a Group of answer choices
Answer: A. debit of $3,745 to Premium on Bonds Payable.
Explanation:
The carrying value of the bonds at redemption date is $103,745.
The bonds retired however, had a face value of $100,000.
The company therefore paid a premium on these bonds which is:
= 103,745 - 100,000
= $3,745
This amount will be debited to the Premium on Bonds Payable account.
where q is the quantity of bicycles produced. When calculating the marginal revenue and marginal profit in this problem, use the approach given for the marginal cost and marginal revenue in the discussions in your textbook. a) If the fixed cost in producing the bicycles is $2800, find the total cost to produce 30 bicycles. Answer: $ 4718.9869 equation editorEquation Editor b) If the bikes are sold for $200 each, what is the profit (or loss) on the first 30 bikes
Question Completion
A manufacturer of mountain bikes has the following marginal cost function:
C(q)=600/(0.7q+5)
Answer:
a. The total cost = $3,492.40
b. The profit on the first 30 bikes is:
= $2,507.60
Explanation:
a) Data and Calculations:
Fixed cost for producing the bicycles = $2,800
Number of bicycles produced = 30
Selling price per bike = $200
Marginal cost (C(q)) =600/(0.7q+5)
= 600/ (0.7*30 + 5)
= 600/ (21 + 5)
= 600/26
= $23.08
Total cost = Fixed cost + (C(q))
= $2,800 + $23.08 * 30
= $2,800 + $692.40
= $3,492.40
Profit:
Sales revenue $6,000 ($200 * 30)
Less Total cost 3,492.40
Profit = $2,507.60
3. Suppose you are thinking of purchasing the Moore Co.’s common stock today. If you expect Moore to pay $3.1, $3.38, $3.70, $4.02, and $4.38 dividends at the end of year one, two, three, four, and five respectively and you believe that you can sell the stock for $95 at the end of year five. If you required return on this investment is 11%, how much will you be willing to pay for the stock today?
Answer:
$69.87
Explanation:
The price i would be willing to pay for the stock can be determined by finding the present value of the dividend payments
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Cash flow in year 1 = 3.1
Cash flow in year 2 = 3.38
Cash flow in year 3 = 3.70
Cash flow in year 4 = 4.02
Cash flow in year 5 = 4.38 + 95 = 99.38
I = 11%
Present value = $69.87
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
On December 31, 2021 Sun Devils Company has outstanding bonds payable with a face value of $700,000, discount on bonds payable of $60,000, and interest payable of $15,000. The bonds mature on January 1, 2025, and interest is payable on a semi-annual basis. What amounts will be reported in the current liabilities section and long-term liabilities section of the balance sheet for these bonds
Answer:
current liabilities = $75,000
long-term liabilities = $700,000
Explanation:
Current liabilities includes a company`s obligation due for payment within a period of 12 months and long-term liabilities are company's obligation due for payment for period exceeding 12 months.
Trinkle Co., Inc. made several purchases of long-term assets in Year 1. The details of each purchase are presented here.
New Office Equipment
1. List price: $41,900; terms: 2/10 n/30; paid within discount period.
2. Transportation-in: $860. Installation: $510.
3. Cost to repair damage during unloading: $431.
5. Routine maintenance cost after six months: $110.
Basket Purchase of Copier, Computer, and Scanner for $51,000 with Fair Market Values
1. Copier $22,755.
2. Computer $6,765.
3. Scanner $31,980.
Land for New Warehouse with an Old Building Torn Down
1. Purchase price, $82,400.
2. Demolition of building, $4,750.
3. Lumber sold from old building, $1,800.
4. Grading in preparation for new building, $7,700.
5. Construction of new building, $217,000.
Required:
In each of these cases, determine the amount of cost to be capitalized in the asset accounts.
Answer:
New Office Equipment $42,863
Basket Purchase Of Copier, Computer, Scanner $61,500
Land For New Warehouse $310,050
Explanation:
Calculation to determine the amount of cost to be capitalized in the asset accounts
NEW OFFICE EQUIPMENT
Amount of cost to be capitalised in the asset accounts = $41,900*0.98+$860+$510+$431
Amount of cost to be capitalised in the asset accounts =$41,062+$860+$510+$431
Amount of cost to be capitalised in the asset accounts =$42,863
BASKET PURCHASE OF COPIER, COMPUTER AND SCANNER
Amount of cost to be capitalised in the asset accounts = $22,755 + $6,765 + $31,980
Amount of cost to be capitalised in the asset accounts= $61,500
LAND FOR NEW WAREHOUSE with an old building torn down
Amount of cost to be capitalised in the asset accounts = $82,400 + $4,750 - $1,800 + $7,700 + $217,000
Amount of cost to be capitalised in the asset accounts = $310,050
Therefore The Amount of cost to be capitalised in the asset accounts are:
New Office Equipment $42,863
Basket Purchase Of Copier, Computer, Scanner $61,500
Land For New Warehouse $310,050
Suresh Co. expects its five departments to yield the following income for next year.
Dept. M Dept. N Dept. O Dept. P Dept. T Total
Sales $82,000 $44,000 $78,000 $65,000 $43,000 $312,000
Expenses
Avoidable 17,300 45,400 18,000 21,500 51,300 $153,500
Unavoidable 57,800 21,600 5,700 54,300 20,300 $159,700
Total expenses 75,100 67,000 23,700 75,800 71,600 313,200
Net income (loss) $6,900 $(23,000) $54,300 $(10,800) $(28,600) $(1,200)
Required:
Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios.
Question Completion:
Management eliminates departments with sales dollars that are less than avoidable expenses.
Answer:
Suresh Co.
Departmental Income Statements
Dept. M Dept. O Dept. P Total
Sales $82,000 $78,000 $65,000 $225,000
Expenses
Avoidable 17,300 18,000 21,500 $56,800
Unavoidable 57,800 5,700 54,300 $159,700
Total expenses 75,100 23,700 75,800 216,500
Net income (loss) $6,900 $54,300 $(10,800) $8,500
Explanation:
a) Data and Calculations:
Dept. M Dept. N Dept. O Dept. P Dept. T Total
Sales $82,000 $44,000 $78,000 $65,000 $43,000 $312,000
Expenses
Avoidable 17,300 45,400 18,000 21,500 51,300 $153,500
Unavoidable 57,800 21,600 5,700 54,300 20,300 $159,700
Total expenses 75,100 67,000 23,700 75,800 71,600 313,200
Net income (loss) $6,900 $(23,000) $54,300 $(10,800)$(28,600)$(1,200)
b) The unavoidable expenses will not change when the two departments have been eliminated. This is why the total unavoidable expenses and the total net income do not tally with the departmental unavoidable and net income sums.
if you are going to create or own a business, what would it be? List at least 3 and cite your reasons why you have listed them.
Answer:
If I were to create a business, and had to choose three alternatives of commercial sectors in which to get involved, I would choose the following:
-Renewable energies, given that given the eventual disappearance of fossil fuels and the rise of electric cars, renewable energies will become the main source of power in the medium-term future.
-Mining of cryptocurrencies, inasmuch as these currencies have been classified as the money of the future, and the exponential growth they have had since their inception has been remarkable.
-Retail of essential consumer goods, such as food, as it is a necessary industry and whose consumption, despite the ups and downs of the economy, never declines.
Suppose Megan is considering emigrating from her home country.
A fictional country of Klaxon has the same policies and institutions as Megan's home country, except that it has greater price stability. If Megan's decision to emigrate is based solely on the prospects for economic growth, she would_________.
Following Megan's decision, the western-most province of Klaxon separates from the rest of the country to form a new country, West Klaxon. West Klaxon plans to retain all the policies and institutions of Klaxon, except that West Klaxon will have less certainty in the rule of law. As a result, West Klaxon is a__________attractive emigration destination, from an economic perspective, than Klaxon.
Answer:
a. emigrate
b. more
Explanation:
Immigration attractiveness is a factor that draws immigrants to a foreign country. A country becomes more attractive when the economic prospects are brighter than at the home-country. The degree of immigration law enforcement also helps to either attract or deter potential migrants. In recent years, wars and misgovernment have propelled millions to move boundaries. At the same time, countries are imposing migration restrictions by imposing and implementing strict laws.
Charles sells high-end electronic gadgets. Because of the nature of the products he deals with, Charles accepts payment through credit cards. What is he offering his customers, and how is it benefiting him?
Charles sells high-end electronic gadgets. Because of the nature of the products he deals with, Charles accepts payment through credit cards. This way, he is offering A)______
to his customers and mitigating the
B)______ involved in it.
A. discounts, loyalty, credits
B. loyalty, risk, advantages
Answer:
A. Credits
B. Risk
Explanation:
Charles is offering his customers to buy goods on credits. He is neither offering any discount (as the price of the high-end electronic gadgets are not changing) nor is he seeking any loyalty from his customers.
While the benefit Charles is gaining from this is that the risk involved in giving credit through credit card is being mitigated. If Charles had himself given the credit, then there would have been the risk of non-payment which he would have to bear. In this case the supporting bank or any other financial institution will bear the risk if the end buyer does not pay the credit card bill on time.
Answer:
credit, risks
Explanation:
Corect on edmentum
Place the events in order to describe how money the Fed adds to the economy starts to be multiplied. The reserve requirement in this example is 10%.
a. The bank lends $900 to a customer needing a loan.
b. The store owner deposits the $900 in another bank.
c. The customer spends the $900 at a store.
d. The bank sets $100 aside as required reserves.
e. The Fed buys a security from a bank for $1,000.
Answer:
1. e. The Fed buys a security from a bank for $1,000.
In order to increase money supply, the Fed buys a security from the bank and gives them money.
2. d. The bank sets $100 aside as required reserves.
The bank will set aside 10% of the money paid by the Fed which comes to $100 leaving the bank with $900.
3. a. The bank lends $900 to a customer needing a loan.
The bank then lends this money to customer who needed it.
4. c. The customer spends the $900 at a store.
The customer then spends the money thereby transferring it to another party.
5. b. The store owner deposits the $900 in another bank.
The store owner then takes the money spent by the customer and deposits it in another bank. That bank then gives the Fed 10% and then the cycle repeats.
Answer:
E.
D.
A.
C.
B.
Explanation:
Maplewood Company incurred the following costs for 70,000 units: Variable costs $420,000 Fixed costs 392,000 Maplewood has received a special order from a foreign company for 3,000 units. There is sufficient capacity to fill the order without jeopardizing regular sales. Filling the order will require spending an additional $6,300 for shipping. If Maplewood wants to break even on the order, what should the unit sales price be
Answer:
$8.1
Explanation:
Variable cost to be incurred for the offer = ($420,000/70,000) * 3,000
Variable cost to be incurred for the offer = $6 * 3,000
Variable cost to be incurred for the offer = $18,000
Additional Fixed cost = $6,300
Total Cost incurred for the offer = Variable cost to be incurred for the offer + Additional Fixed cost
Total Cost incurred for the offer = $18,000 + $6,300
Total Cost incurred for the offer = $24,300
Unit Sales Price (Break even) = Total Cost incurred for the offer / 3,000 units
Unit Sales Price (Break even) = $24,300 / 3,000 units
Unit Sales Price (Break even) = $8.1
Jesse is a part-time nonexempt employee in Austin, Texas, who earns $12.50 per hour. In January, during the last biweekly pay period he worked 35 hours. He is married with zero withholding allowances, which means his federal income tax deduction is $10.00, and has additional federal tax withholding of $30 per pay period. (Do not round interim calculations, only round final answer to two decimal points.) What is his net pay?
Answer: $364.03
Explanation:
From the information given, Jesse's net pay will be:
Gross Pay = $12.50 × 35 = $437.50
Less: Federal tax = $30.00
Less: Fica = $27.12
Less: Medicare $6.35
Less: federal income tax deduction = $10.00
Less: State = $0.00
Net Pay = $364.03
Based on the calculation above, Jesse's net pay will be $364.03
A Joe and Jorge both graduated from an engineering college and decided to donate money to their college. They set up 10 engineering scholarships per year starting in 2046 for every year (assume more than 100 years). If $50,000 is invested in the trust fund in the year 2021 and if it earns a very good rate of return of 12% per year, what will the amount of each scholarship be starting in 2046
Answer:
Each scholarship will have an amount of $ 85,000.
Explanation:
Since Joe and Jorge both graduated from an engineering college and decided to donate money to their college, and they set up 10 engineering scholarships per year starting in 2046 for every year, if $ 50,000 is invested in the trust fund in the year 2021 and if it earns a very good rate of return of 12% per year, to determine what will the amount of each scholarship be starting in 2046 the following calculation must be performed:
(50,000 x 1.12 ^ (2046-2021)) / 10 = X
(50,000 x 1.12 ^ 25) / 10 = X
850,003.22 / 10 = X
85,000.32 = X
Therefore, each scholarship will have an amount of $ 85,000.
Hardware is adding a new product line that will require an investment of . Managers estimate that this investment will have a 10-year life and generate net cash inflows of the first year, the second year, and each year thereafter for eight years. The investment has no residual value. Compute the payback period.
Answer: 6.17 years
Explanation:
Payback period = Period before debt is paid back + Amount left to to be paid back / Cashflow in year of payback.
Year Cash Flows Amount left to be paid back
0 (1,540,000) (1,540,000)
1 315,000 (1,225,000)
2 265,000 (960,000)
3 230,000 (730,000)
4 230,000 (500,000)
5 230,000 (270,000)
6 230,000 (40,000)
7 230,000 190,000
Year before payback = 6
Payback amount = 6 + (40,000 / 230,000)
= 6.17 years
Discount loan. Up-Front Bank uses discount loans for all its customers who want one-year loans. Currently, the bank is providing one-year discount loans at . What is the effective annual rate on these loans? If you were required to repay at the end of the loan for one year, how much would the bank have given you at the start of the loan? If you were required to repay $ at the end of the loan for one year, how much would the bank have given you at the start of the loan?
Complete Question:
Discount loan. Up-Front Bank uses discount loans for all its customers who want one-year loans. Currently, the bank is providing one-year discount loans at 7.9%. What is the effective annual rate on these loans? If you were required to repay $205,000 at the end of the loan for one year, how much would the bank have given you at the start of the loan? If you were required to repay $205,000 at the end of the loan for one year, how much would the bank have given you at the start of the loan? $Џ (Round to the nearest dollar.)
Answer:
Up-Front Bank
a. The effective annual rate on these loans = 8.58%
b. The amount would have given $188,805.
Explanation:
a) Data and Calculations:
Discount on loans = 7.9%
Effective annual rate on the loans = 7.9%/(100% - 7.9%)
= 7.9%/92.1%
= 0.0858
= 8.58%
b) Amount to be repaid to the bank = $205,000
Amount given after the discount is deducted = $205,000 * 0.921
= $188,805
Amount deducted as interest = $16,195 ($205,000 * 7.9%)
Check:
Effective interest rate = $16,195/$188,805 * 100 = 8.58%
c) Up-Front Bank's discount loan does not require the payment of interest or any other charges. Instead, these are deducted upfront from the face amount of the loan before it is given out. The implication is that the receiver of the loan receives less than the face value. In determining the effective interest rate, the discount amount is divided by the actual loan amount received, multiplied by 100.
From a list of companies below select one that would use a job-order costing system. Manufacturer of swimming pool chemicals. Manufacturer of custom hot tubs and spas. Manufacturer of ceramic tile. Producer of yogurt. Home builders Manufacturer of custom tool sheds. Manufacturer of papers clips. Manufacturer of balloons. Manufacturer of custom emergency rescue vehicles.
Answer:
Companies that would use a job-order costing system include:
1. Manufacturer of custom hot tubs and spas.
2. Home builders.
3. Home builders Manufacturer of custom tool sheds.
4. Manufacturer of custom emergency rescue vehicles.
Explanation:
One common feature among these manufacturers is that their products are custom-made. Job-order costing system is suitable for the manufacture of individual products and not for mass production of similar items. Each product is unique and will usually meet the specifications and taste of each customer. Since their prices are not for the mass market, their costs are usually accounted for differently using the Job-order costing system.
Childress Company produces three products, K1, S5, and G9. Each product uses the same type of direct material. K1 uses 4.2 pounds of the material, S5 uses 4.1 pounds of the material, and G9 uses 5.3 pounds of the material. Demand for all products is strong, but only 53,700 pounds of material are available. Information about the selling price per unit and variable cost per unit of each product follows.
K1 S5 G9
Selling price $155.8 $108.92 $205.55
Variable costs 91.00 90.00 136.00
Required:
Calculate the contribution margin per pound for each of the three products.
Answer and Explanation:
The computation of the contribution margin per pound for each of the three products is shown below:
As we know that
Selling price per pound - Variable cost per pound = Contribution margin
For Product K1
= $155.8 - $91
= $64.8
For Product S5
= $108.92 - $90
= $18.92
For Product G9
=$205.55 - $136
= $69.55
Now the contribution margin per pound is
For Product K1 = Contribution margin ÷ Pound
= 64.8 ÷ 4.2
= 15.43 per pound
For Product S5 = Contribution margin ÷ Pound
= 18.92 ÷ 4.1
= 4.61 per pound
For Product G9 = Contribution margin ÷ Pound
= 69.55 ÷ 5.3
= 13.22 per pound
Machinery purchased for $73,800 by Blossom Co. in 2016 was originally estimated to have a life of 8 years with a salvage value of $4,920 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2021, it is determined that the total estimated life should be 10 years with a salvage value of $5,535 at the end of that time. Assume straight-line depreciation.
Required:
Prepare the entry to correct the prior years' depreciation, if necessary.
Answer:
See explanation
Explanation:
Prior year depreciation lies in the Profit Reserve called Retained Earnings and in the Asset therefor correct Profit Balance and Asset Balances to effect this adjustment.
Depreciation Expense = (Cost - Salvage Value ) ÷ Estimated Useful Life
On January 1, Year 1 Residence Company issued bonds with a $50,000 face value. The bonds were issued at 96 resulting in a 4% discount. They had a 20 year term and a stated rate of interest of 7%. Assuming a straight-line amortization of the discount, the amount of interest expense recognized on the December 31, Year 1 income statement is
Answer:
$3,600
Explanation:
According to the scenario, computation of the given data are as follows,
Bonds Face value = $50,000
Discount = 4%
Time period = 20 years
Interest rate = 7%
Premium = $50000 - ( $50,000 × 96%) = $2,000
So, we can calculate interest expense by using following formula,
Interest expense = ($50,000 × 7%) + ($2,000 ÷ 20)
= $3,600
Voltac Corporation (a U.S.-based company) has the following import/export transactions denominated in Mexican pesos in 2020:
March 1 Bought inventory costing 111,000 pesos on credit.
May 1 Sold 70 percent of the inventory for 91,000 pesos on credit.
August 1 Collected 75,500 pesos from customers.
September 1 Paid 65,500 pesos to suppliers.
Currency exchange rates for 1 peso for 2020 are as follows:
March 1 $0.20
May 1 0.21
August 1 0.22
September 1 0.23
December 31 0.24
Assume that all receipts were converted into dollars as soon as they were received. For each of the following accounts, what amount will Voltac report on its 2020 financial statements?
a. Inventory.
b. Cost of Goods Sold.
c. Sales.
d. Accounts Receivable.
e. Accounts Payable.
f. Cash.
Answer and Explanation:
The computation is shown below:
a. The inventory is
= 111,111 pesos × 30% × $0.20
= $6,660
b. The cost of goods sold is
= 111,111 pesos × 70% × $0.20
= $15,540
c. The sales is
= 91,000 pesos × $0.21
= $19,110
d. The account receivable is
= (91,000 pesos - 75,000 pesos) × $0.24
= $3,720
e. The account payable is
= (111,000 pesos - 65,500 pesos)× $0.24
= $10,920
f. The cash is
= ($75,500 × $0.22) - ($65,500 × $0.23)
= $1,545
Amy and Mack Holly from Rapid City, South Dakota, have been married for three years. They recently bought a home costing $212,000 using a $190,000 mortgage. They have no other debts. Mack earns $61,000 per year, and Amy earns $75,000. Each has a retirement plan valued at approximately $15,000. They recently received an offer in the mail from their mortgage lender for a mortgage life insurance policy of $190,000. Their only life insurance currently is a $19,000 cash-value survivorship joint life policy. They each would like to provide the other with support for at least five years if one of them should die.
Required:
Assuming $18,000 in final expenses and $20,000 allocated to help make mortgage payments, calculate the amount of life insurance they should purchase using the needs-based approach.
Answer:
I do not have time to answer this question, but you could answer this question on a calculator and find out the order and if its multiplying, subtracting, dividing or adding.
Explanation:
Thank you!-Brainly UserAmy and Mack should purchase a life insurance policy with a coverage amount of $1,037,000, using the needs-based approach.
To calculate the amount of life insurance Amy and Mack should purchase using the needs-based approach, we need to consider various factors such as outstanding debts, living expenses, and specific financial goals. Given the information provided, we will calculate the life insurance amount required to cover final expenses and help make mortgage payments for at least five years.
Final expenses:
Final expenses = $18,000
Mortgage payment assistance:
Mortgage payment assistance per year = $20,000
Mortgage payment assistance for five years = $20,000 * 5 = $100,000
Outstanding mortgage:
Outstanding mortgage = $190,000
Current joint life policy:
Current joint life policy = $19,000
Income replacement:
Amy's income = $75,000
Mack's income = $61,000
Total annual income = $75,000 + $61,000 = $136,000
Income replacement for five years = $136,000 * 5 = $680,000
Retirement plan:
Amy's retirement plan = $15,000
Mack's retirement plan = $15,000
Total retirement plan = $15,000 + $15,000 = $30,000
Now, let's calculate the total life insurance amount needed:
Total life insurance needed = Final expenses + Mortgage payment assistance + Outstanding mortgage + Current joint life policy + Income replacement + Retirement plan
= $18,000 + $100,000 + $190,000 + $19,000 + $680,000 + $30,000
= $1,037,000
Therefore, using the needs-based approach, Amy and Mack should purchase a life insurance policy with a coverage amount of $1,037,000.
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Allison Company has 40,000 shares of $320 par value, 5% cumulative preferred stock and 140,000 shares of $80 par value common stock. Allison declares and pays cash dividends amounting to $900,000. If no arrearage on the preferred stock exists, how much in dividends per share (use two decimal places) is paid to the common stockholders
Answer:
$1.86
Explanation:
Preference shares get first preference when dividends are being paid. So, out of the dividend declared, we first payoff Preference dividends then the remainder goes to Common Stock holders.
Cash Dividend = $900,000
Preference Dividends
Preference Stockholders receive a fixed dividend calculated as :
Dividend = 40,000 shares x $320 x 5 % = $640,000
Dividend per share = $640,000 / 40,000 = $16.00
Common Stockholders Dividends
Remainder = $900,000 - $640,000 = $260,000
Dividend per share = $260,000 / 140,000 = $1.86
Conclusion :
Dividends per share paid to the common stockholders is $1.86
Waterway Corp. purchased machinery for $315,600 on May 1, 2020. It is estimated that it will have a useful life of 10 years, salvage value of $18,600, production of 237,600 units, and working hours of 25,000. During 2021, Waterway Corp. uses the machinery for 2,650 hours, and the machinery produces 30,300 units. From the information given, compute the depreciation charge for 2021 under each of the following methods.
a. straight line $_____:
b. Units-of-output $________:
c. Working Hours $______:
d. Sum-of-the-years-digits $_________:
e. Declining balance (use 20% as the annual rate).
Answer:
Waterway Corp.
a. straight line $__29,700___:
b. Units-of-output $__37,875___:
c. Working Hours $___31,482___:
d. Sum-of-the-years-digits $____48,600_____:
e. Declining balance (use 20% as the annual rate) = $54,704
Explanation:
Cost of machinery purchased on May 1, 2020 = $315,600
Estimated useful life = 10 years
Salvage value = $18,600
Depreciable amount = $297,000
Production units = 237,600
Working hours = 25,000
Straight-line method:
Annual Depreciation Expense = $29,700 ($297,000/10)
Production units:
Depreciation per unit = $1.25 ($297,000/237,600)
Working hours:
Depreciation per hour = $11.88 ($297,000/25,000)
Sum-of-the-years-digits = 55 years;
Depreciation per year = $5,400 ($297,000/55)
Declining balance rate = 20% (100/10 * 2)
During 2021:
Straight-line:
Depreciation expense = $29,700
Machine hours used = 2,650
Depreciation expense = 2,650 * $11.88
= $31,482
Production units = 30,300
Depreciation expense = 30,300 * $1.25
= $37,875
Sum-of-the-years-digits:
Depreciation expense = 9 * $5,400 = $48,600
Declining balance:
2020 = $315,600 * 20% * 8/12 = $63,120 * 8/12 = $42,080
2021 balance = $273,520
2021 Depreciation expense = $273,520 * 20% = $54,704
Delaware budgeted 35,000 barrels of oil for purchase in June for $90 per barrel. Direct labor budgeted in the chemical process was $240,000 for June. Factory overhead was budgeted at $400,000 during June. The inventories on June 1 were estimated to be:
Oil $15,200
P1 8,300
P2 8,600
Work in process 12,900
The desired inventories on June 30 were:
Oil $16,100
P1 9,400
P2 7,900
Work in process 13,500
Use the preceding information to prepare a cost of goods sold budget for June.
Answer:
See
Explanation:
Delaware chemical company
Cost of goods sold budget
Direct materials opening inventory
$15,200
Add: purchases (35,000 barrels × $90 per barrels)
$3,150,000
Less. Direct materials closing inventory
$16,100
Direct materials used $3,149,000
Direct labor $240,000
Factory overhead $400,000
Total manufacturing costs $3,789,100
Add: opening work in process $12,900
Cost of goods available for manufacture $3,802,000
Venture capital required rate of return. Blue Angel Investors has a success ratio of with its venture funding. Blue Angel requires a rate of return of for its portfolio of lending, and the average length on its loans is years. If you were to apply to Blue Angel for a $ loan, what is the annual percentage rate you would have to pay for this loan?
Complete Question:
Venture capital required rate of return. Blue Angel Investors has a success ratio of 10% with its venture funding. Blue Angel requires a rate of return of 20% for its portfolio of lending, and the average length on its loans is 5 years. If you were to apply to Blue Angel for a $100,000 loan, what is the annual percentage rate you would have to pay for this loan?
Answer:
Blue Angel Venture Capital
The annual percentage rate to be paid for this loan is:
= 38%
Explanation:
a) Data and Calculations:
Blue Angel Loan = $100,000
Required rate of interest = 20%
Average length of Blue Angel loan = 5 years
Success ratio of venture funding = 10%
Annual loss sustained from loan = 20% * (100% - 10%)
= 20% * 90%
= 18%
Therefore the annual percentage rate to be paid for this loan is:
38% (20 + 18%)
b) The implication is that the required rate of return expected by Blue Angel will be weighed by its failure rate of 90%. This indicates additional cost of loan. Therefore, the total annual percentage rate is the addition of the required rate of return and the rate of loss sustained.
Utilize the following financial information to answer the question. Current value of land $2,000,000 Cost to rebuild the physical structure $7,500,000 Furniture, fixtures and equipment $ 500,000 Economic deductions $ 800,000 Functional obsolescence $ 200,000 Physical deterioration $1,000,000 Based on the cost replacement approach, how much would be estimated value of the property
Answer: $8,000,000
Explanation:
Based on the cost replacement approach:
Estimated value = Land Value + Replacement Value - Deductions from value
Replacement value = Cost to rebuild physical structures + Furniture
= 7,500,000 + 500,000
= $8,000,000
Economic deductions:
= 800,000 + 200,000 + 1,000,000
= $2,000,000
Estimated value = 2,000,000 + 8,000,000 - 2,000,000
= $8,000,000
The closing process is also known as which of the following?
A. Project completion
B. Project postmortem
C. Project wake
D. Project parity
Answer:
A. Project completion is the answer
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Lin Land Ltd. (LLL) is considering investing in an apartment complex. The sale price is $450,000 and LLL expects to have positive after-tax cash flows from rents of $20,000 for the next three years. At the end of the third year, LLL anticipates selling the apartment complex for a net after-tax gain on sale of $500,000. If LLL's required return is 15%, should LLL go ahead and purchase the apartment complex?
Answer:
no
Explanation:
we need to determine the npv to know if it is suitable
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
cash flow in year 0 = -450,000
cash flow in year 1 and 2 = 20,000
cash flow in year 3 = 20,000 + 500,000
i = 15%
npv = -75,577.38
The cost of equipment purchased by Tamarisk, Inc., on June 1, 2020, is $142,800. It is estimated that the machine will have a $8,400 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 67,200, and its total production is estimated at 672,000 units. During 2020, the machine was operated 7,020 hours and produced 64,350 units. During 2021, the machine was operated 6,435 hours and produced 56,160 units.
Compute depreciation expense on the machine for the year ending December 31, 2020, and the year ending December 31, 2021, using the following methods. (Round depreciation per unit to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 45,892.) 2020 2021 0
(a) Straight-line - 0
(b) Units-of-output - 0
(c) Working hours - 0
(d) Sum-of-the-years-digits - 0
(e) Double-declining-balance (twice the straight-line rate) $
Answer:
A. 2020 $11,200
2021 $19,200
B. 2020 $12,870
2021 $11,232
C. 2020 $14,040
2021 $12,870
D. 2020 $19,600
2021 $30,800
E. 2020 $23,799
2021 $33,999
Explanation:
Computation depreciation expense on the machine for the year ending December 31, 2020, and the year ending December 31, 2021,
(A)Computation for depreciation expense using Straight-line method
Using this formula
(cost-salvage) / useful life x depreciation from purchase date to end year
Let plug in the formula
2020
Depreciation expense= $142,800 - 8,400 / 7
Depreciation expense= 19,200 x (7/12)
Depreciation expense= $11,200 (for 2020)
2021
Depreciation expense= $142,800 - 8,400 / 7
Depreciation expense= 19,200 (for 2021)
(B) Computation for depreciation expense using Units-of-output Method
Using this formula
(cost - salvage) / total units produced x estimated units 2020/21
Let plug in the formula
Depreciation expense 2020:
Depreciation expense= ($142,800 - 8,400) / 672,000) x 64,350
Depreciation expense= 0.20x 64,350
Depreciation expense= $12,870
Depreciation expense 2021:
Depreciation expense=($142,800 - 8,400) / 672,000) x 56,160
Depreciation expense= 0.20x 56,160
Depreciation expense= $11,232
(C) Computation for depreciation expense using Working hours
Using this formula
(cost-salvage) / total working hours x estimated working hours 2020/21
Let plug in the formula
Depreciation expense 2020:
Depreciation expense= (($142,800 - 8,400)/67,200) x 7,020
Depreciation expense= 2 x 7,020
Depreciation expense= $14,040
Depreciation expense 2021:
Depreciation expense= ($142,800 - 8,400)/67,200) x 6,435
Depreciation expense= 2 x 6,435
Depreciation expense= $12,870
(D)Computation for depreciation expense using
Sum-of-the-years'-digits
n(n+1)/2
Depreciation expense 2020:
Depreciation expense= ($142,800 - 8,400)x 7/28 x 7/12
Depreciation expense=$134,400 x (7/28) x (7/12)
Depreciation expense= 33,600 x (7/12)
Depreciation expense= $19,600
Depreciation expense 2021:
Depreciation expense= (($142,800 - 8,400) x 7/28 x 5/12) +(($142,800-8,400) x 6/28 x 7/12)
Depreciation expense= $14,000 + $16,800
Depreciation expense= $30,800
(E) Computation for depreciation expense using Double-declining-balance
First step
1 / useful life x 100 x 2
= 1/7 x 100 x 2
= 28,57%
Now let calculate the Depreciation expense for 2020 and 2021
Depreciation expense 2020:
Depreciation expense=142,800 x 28.57 x (7/12)
Depreciation expense= $23,799
Depreciation expense 2021:
Depreciation expense=(142,800 -$23,799 ) x 28.57
Depreciation expense= $33,999