On December 31, 2020, Clarkson Company had 100,000 shares of common stock outstanding and 30,000 shares of 7%, $50 par, cumulative preferred stock outstanding. On February 28, 2021, Clarkson purchased 24,000 shares of common stock on the open market as treasury stock paying $45 per share. Clarkson sold 6,000 of the treasury shares on September 30, 2021, for $47 per share. Net income for 2021 was $180,905. Also outstanding at December 31, 2020, were fully vested incentive stock options giving key executives the option to buy 50,000 common shares at $40. These stock options were exercised on November 1, 2021. The market price of the common shares averaged $50 during 2021. Required: Compute Clarkson's basic and diluted earnings per share for 2021. (Round your answers to 2 decimal places.) Basic EPS Diluted EPS
Answer:Basic Earnings per share =0.93
Diluted Earnings per share = 0.83
Explanation:
basic earnings per share = (net income - preferred dividends) / weighted average stocks
Net income $180,905
Less Preference Dividend (30,000× $50×7%) ($105,000)
Attributable to Holders of Common Stock $75,905
Also, Weighted Average Number of Common Stocks is given as
Common Stocks 1 January 100,000
(outstanding sharesx 12/12)
add common Stocks September 30, 2021 1,500
(sold 6000 treasury stocks x 3/12)
less Common Stocks February 28, 2021 (20,000)
(purchased -24,000 treasury stocks x 10/12 )
Weighted Average Number of Common Stocks 81,500
Basic Earnings per share = $75,905/ 81,500 =0.93
B)
Diluted earnings per share = (net income - preferred dividends) / (weighted average stocks + diluted stocks) =
Net income $180,905
Less Preference Dividend(30,000× $50×7%) (($105,000)
Earnings To Holders of Common Stock $75,905
Also, Adjusted Weighted Average Number of Common Stocks
Weighted Average Number of Common Stocks 81,500
Add
diluted stocks = [($50 - $40) / $50] x 50,000 = 10,000
Adjusted Weighted Average Number of Common Stocks 91,500
Diluted Earnings per share = $75,905 /91,500 =0.83
Repurchase by the company of its own common stock $ 41,000 Sale of long-term investment $ 60,000 Interest paid to lenders $ 15,500 Dividends paid to the company's shareholders $ 70,000 Collection by McCorey of a loan made to another company $ 46,000 Payment of taxes to governmental bodies $ 25,500 On the statement of cash flows, some of these events are classified as operating activities, some are classified as investing activities, and some are classified as financing activities. Based solely on the information above, the net cash provided by (used in) investing activities on the statement of cash flows would be
Answer:
The net cash provided by investing activities on the statement of cash flows will be $106,000
Explanation:
Investing activities include all the cash transactions incurred for the fixed asset of the company.
The net cash provided by (used in) investing activities can be calculated as follows
Net cash provided by (used in) investing activities = Sale of long-term investment + Collection by McCorey of a loan made to another company
Where
Sale of long-term investment = $60,000 ( Cash inflow )
Collection by McCorey of a loan made to another company = $46,000 ( Cash Inflow )
Placing values in the fomrula
Net cash provided by investing activities = $60,000 + $46,000 = $106,000
The following information was taken from Slater Company's balance sheet: Fixed assets (net) $1,912,320 Long-term liabilities 460,800 Total liabilities 779,620 Total stockholders' equity 2,293,000 Round your answers to two decimal places. a. Determine the company's ratio of fixed assets to long-term liabilities. fill in the blank 1 b. Determine the company's ratio of liabilities to stockholders' equity. fill in the blank 2
Answer:
4.15
0.34
Explanation:
USCo manufactures and markets electrical components. USCo operates outside the United States through a number of CFCs, each of which is organized in a different country. These CFCs derived the following income for the current year:
Determine the amount of income that USCo must report as a deemed dividend under subpart F in each scenario. (Leave no answer blank. Enter zero if applicable. Enter your answers in millions.)
a. F1 has gross income of $14.00 million, including $700,000 of foreign personal holding company interest and $13.30 million of gross income from the sale of inventory that F1 manufactured at a factory located within its home country.
b. F2 has gross income of $8.6 million, including $6.9 million of foreign personal holding company interest and $1.7 million of gross income from the sale of inventory that F2 manufactured at a factory located within its home country.
Answer:
A. $26.6 million
B. $3.4 million
Explanation:
A. Calculation to determine the amount of income that USCo must report as a deemed dividend under subpart F
Using this formula
Income to be redeemed=(Gross income -Foreign personal holding company interest+Gross income from the sale of inventory)
Let plug in the formula
Income to be redeemed=($14.00 million-$700,000+$13.30 million)
Income to be redeemed=$26.6million
Therefore the amount of income that USCo must report as a deemed dividend under subpart F is $26.6million
B. Calculation to determine the amount of income that USCo must report as a deemed dividend under subpart F
Using this formula
Income to be redeemed=
Gross income -Foreign personal holding company interest +Gross income from the sale of inventory
Let Plug in the formula
Income to be redeemed=($8.6 million-$6.9 million+$1.7 million)
Income to be redeemed=$3.4milliomln
Therefore the amount of income that USCo must report as a deemed dividend under subpart F is $3.4million
A new strip mall is being considered and the developers want to determine how many parking spaces there should be. It is assumed that if the lot is full, an arriving car will leave. Cars arrive at a rate of 15/hour. The average time a customer spends shopping is 30 minutes. Assume the interarrival times and the shopping times are exponentially distributed. Assume the average shopper purchases $150 worth of merchandise and also assume the mall is open 12 hours/day, 350 days/year.
a) If there are 10 spaces, determine the throughput rate of cars departing after completing shopping, the expected number of cars in the parking lot and the rate of lost revenue due to cars leaving because they could not find a space to park.
b) Assume the cost to create a parking spot is $2500. Assuming a 5 year horizon and an internal interest rate of 15%, how many spots should be built to minimize the combined construction and lost revenue costs?
Answer:
The responses to the given question can be defined as follows:
Explanation:
For point a:
Car arrival time[tex]= \frac{15}{hour}[/tex]
Each car arrives at an interval of time of [tex]\frac{60}{15} = 4\ minutes[/tex]
process time [tex]=0.5 \ hour[/tex]
The number of vehicles moving in an hour equals 2 per hour.
As [tex]\frac{15}{2}[/tex] is greater than 1. The device will not work, resulting in such a revenue loss.
Within 44 minutes, a parking lot would be completely full, with only 1 person being serviced, and then the next empty slot would be completed 64 minutes later.
The system's production capacity is 8.5 per hour [a person entering at 0 will exit at 30]. The person that comes in at 4 will leave at 34. Roughly 50 customers would be supported for an hour.
For point b:
The number of customers would be [tex]= 8.5 \times 12 = 102[/tex] for a 12-hour time frame.
Total cost=[tex]12\times 150 = \$1800[/tex]
The total number of customers to be served at an expense of [tex]2500= \frac{2500}{150} = 18[/tex] customers.
What is usually the best way to display date if you have more than 10 results? a. bar graph, b. pie chart, c. line graph, d. none of the above
The best way to display data if you have more than 10 results is usually a bar graph (a).
A bar graph is a chart that uses horizontal or vertical bars to show comparisons among categories. It is a useful tool for visualizing data and comparing values across different categories.
For example, if you have data on the number of people who prefer different types of music, you could use a bar graph to show the relative popularity of each type of music. The bars in the graph would represent the number of people who prefer each type of music, and the height of the bars would correspond to the number of people.
Bar graphs are effective for displaying data when you have more than 10 results because they allow you to easily compare the values of different categories at a glance. They are also easy to read and understand, making them a popular choice for presenting data.
Option b, pie chart, is not usually the best way to display data if you have more than 10 results because pie charts can become cluttered and difficult to read when there are too many slices.
Option c, line graph, is not usually the best choice for displaying data with more than 10 results because line graphs are better suited for showing trends over time rather than comparing values across different categories.
Hope This Helps You!
To continue to receive federal student aid while attending college, students
academic progress.
must show
O A. selective
B. completed
C. satisfactory
OD. exceptional
The answer is C. satisfactory.
To continue to receive federal student aid while attending college, students must show satisfactory academic progress. This means that they must maintain a certain grade point average (GPA) and complete a certain percentage of the classes they attempt. These requirements vary depending on the school and the type of federal student aid the student is receiving. In general, students must maintain a GPA of at least 2.0 (on a 4.0 scale) and complete at least 67% of their classes in order to remain eligible for federal student aid. If students fail to meet these requirements, they may be placed on academic probation or lose their financial aid altogether. It is important for students to make sure they are making satisfactory progress in order to continue receiving financial assistance while in school.
Hope This Helps You!
Answer:
C
Explanation:
An unconfined aquifer with a head of 120 ft (from the bottom of the aquifer) was evaluated using a pumping test. After the head reached the steady state, A total of 24,000 cubic foot of water was pumped out in a period of 6 hours. At a distance of 1,000 ft from the pumping well, the drawdown was 40 ft; and at a distance of 5,000 ft it was 20 ft. Find the permeability (in ft/sec, and cm/sec) of the aquifer assuming that steady-state conditions prevail. (pay attention to the relation drawdown and head; use the formula I discussed in class).
Here's link[tex]^{}[/tex] to the answer:
bit.[tex]^{}[/tex]ly/3gVQKw3
The management of Zesty Corporation is considering the purchase of a new machine costing $400,000. The company s desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for 1 through 5 years are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability in this situation: The cash payback period for this investment is:______
a. 4 years
b. 5 years
c. 2 years
d. 3 years
Answer:
d. 3 years
Explanation:
Missing question: 'Year Income from Operations Net Cash Flow. 1 $100,000 $180,000, 2 40,000 120,000, 3 20,000 100,000, 4 10,000 90,000, 5 10,000 90,000"
Year Income from Net cash Investment Unrecovered Investment
Operations Flow at the end of year
0 400,000 400,000
1 100,000 180,000 220,000
2 40,000 120,000 100,000
3 20,000 100,000 -
4 10,000 90,000 (90,000)
5 10,000 90,000 (180,000)
Entire investment is recovered by the end of 3 year. So, pay back period is 3 Years.
1. A family with a gross monthly income of $8,500 is considering a $250,000, 30 year, 6.25% fix rate conventional mortgage to buy a $300,000 house. Move-in costs include the down payment, a $1,600 loan origination fee, 1 discount point, $3,500 in third party fees, 14 months of mortgage insurance premium, 2 months of property taxes, and 14 months of hazard insurance. The family estimates annual real estate taxes as 1.2%, annual hazard insurance as 0.4%, and annual maintenance as 1% of the purchase price. The annual private mortgage insurance premium is estimated as 1% of the loan amount. The household has monthly installment payments of $500 and is in the 35% marginal tax bracket. The lender requires that the housing expense ratio be no higher than 28%, and the monthly payment ratio no higher than 36%.
a) Can this family qualify for the loan?
b) What is the total amount of the move-in costs?
2. A family with a gross monthly income of $11,000 is considering a $357,000, 30 year, 7% mortgage to buy a house priced at $375,800. The annual private mortgage insurance premium is estimated as 0.78% of the loan amount. Move-in costs include the down payment, a 1% loan origination fee, 1 discount point, $5,400 in third party fees, 14 months of mortgage insurance premium, 6 months of property taxes, and 14 months of hazard insurance. The family estimates annual real estate taxes as 1.25%, annual hazard insurance as 0.4%, and annual maintenance as 1% of the purchase price. The household has a monthly installment payment of $1,000 and is in the 28% marginal tax bracket. Maximum housing expense ratio is 28%, while maximum total monthly payment ratio is 36%.
a) Can this family qualify for the loan?
b) What is the total amount of the move-in costs?
A manufacturing firm is planning on expanding its existing operations. The expansion project is significant and will require the firm to house the expansion in a different location. The firm is considering building on a lot they own across town. The lot is currently vacant and it was paid for nearly 20 years ago. Given this information, which of the following statements is correct?
a) The lot is not an incremental cash flow because it is not being utilized at this time.
b) The lot is an incremental cash flow because it represents an opportunity cost.
c) The lot is an incremental cash flow because it represents a sunk cost.
Answer:
The lot is an incremental cash flow because it represents an opportunity cost.
Explanation:
The importance of cash flow for project use is that It is a change in the firm's total future cash flow that is as a result of a direct output or consequence of the decision of that particular project.
Incremental cash flows
This is commonly refered to as tbe said difference obtained between or when there is a firms future cash flows with a project and those without a project. As it is used for a project evluation, it comprises of any and all changes in the firm's future cash flows that are a direct consequence of taking the project.
An Opportunity cost?
This is simply refered to as the most essential or valuable alternative (other choice) that is given up if a particular investment is undertaken by an organization or firm.
Financial information is presented below: Operating expenses $ 63000 Sales returns and allowances 14000 Sales discounts 6000 Sales revenue 196000 Cost of goods sold 98000 The amount of net sales on the income statement would be
Answer: 176,000
Explanation:
The amount of net sales on the income statement will be calculated thus:
Sales Revenue = 196000
Less: Sales Discount = 6000
Less: Sales returns and allowances = 14000
Therefore, net sales will be:
= 196000 - 6000 - 14000
= 176000
Swifty Corporation produces a product that requires 2.6 pounds of materials per unit. The allowance for waste and spoilage per unit is 0.3 pounds and 0.1 pounds, respectively. The purchase price is $2 per pound, but a 2% discount is usually taken. Freight costs are $0.10 per pound, and receiving and handling costs are $0.07 per pound. The hourly wage rate is $12.00 per hour, but a raise which will average $0.30 will go into effect soon. Payroll taxes are $1.20 per hour, and fringe benefits average $2.40 per hour. Standard production time is 1.5 hour per unit, and the allowance for rest periods and setup is 0.5 hours and 0.4 hours, respectively. The standard direct labor hours per unit is:_________
Answer:
Swifty Corporation
The standard direct labor hours per unit is:_________
= 0.6 hours.
Explanation:
a) Data and Calculations:
Materials required per unit = 2.6 pounds
Allowance for waste per unit = 0.3 pounds
Allowance for spoilage per unit = 0.1 pounds
Standard materials per unit = 3 pounds (2.6 + 0.3 + 0.1)
Purchase price per pound = $1.96 ($2 - 0.04)
Freight costs per pound = $0.10
Receiving and handling costs per pound = $0.07
Hourly wage rate = $12 per hour
Possible raise in hourly wage = $0.30
Payroll taxes = $1.20 per hour
Fringe benefits average = $2.40 per hour
Standard production time per unit = 1.5 hour
Allowance for rest periods = 0.5 hours
Allowance for setup = 0.4 hours
The standard direct labor hours per unit = 0.6 hours(1.5 - 0.5 - 0.4)
Turner, Roth, and Lowe are partners who share income and loss in a 2:3:5 ratio. After lengthy disagreements among the partners and several unprofitable periods, the partners decide to liquidate the partnership. Immediately before liquidation, the partnership balance sheet shows total assets, $150,000; total liabilities, $98,000; Turner, Capital, $4,500; Roth, Capital, $15,000; and Lowe, Capital, $32,500. The cash proceeds from selling the assets were sufficient to repay all but $38,000 to the creditors.
Required:
a. Calculate the loss from selling the assets.
b. Allocate the loss from part a to the partners.
c. Determine how much, if any, each partner should contribute to the partnership to cover any remaining capital deficiency.
Answer:
Turner, Roth, and Lowe Partnership
a. The Loss from selling the assets = $90,000
b. Allocation of the loss to the partners:
Turner = $18,000 (2/10 * $90,000)
Roth = $27,000 (3/10 * $90,000)
Lowe = $45,000 (5/10 * $90,000)
c. Capital contribution by partners to cover capital deficiency:
Turner Roth Lowe Total
Capital contribution $13,500 $12,000 $12,500 $38,000
Explanation:
a) Data and Calculations:
Total assets, $150,000
Total liabilities, $98,000
Turner, Capital, $4,500
Roth, Capital, $15,000
Lowe, Capital, $32,500
Liabilities + Equity $150,000
Cash proceeds from sale of assets = $60,000 ($98,000 - $38,000)
Loss from selling the assets = $90,000 ($150,000 - $60,000)
Loss sharing ratio = 2:3:5
Loss sharing:
Turner = $18,000 (2/10 * $90,000)
Roth = $27,000 (3/10 * $90,000)
Lowe = $45,000 (5/10 * $90,000)
Capital Deficiency =
Turner Roth Lowe
Capital accounts $4,500 $15,000 $32,500
Loss sharing (18,000) (27,000) (45,000)
Capital Deficiency ($13,500) ($12,000) ($12,500)
Capital contribution $13,500 $12,000 $12,500
b) After contributing to the capital deficiencies to the tune of $38,000, the remaining liabilities will be settled.
Which is true of categories in a budget?"
All individuals should have the same budget categories.
Individuals may have different categories based on age, lifestyle, and income.
Answer: Individuals may have different categories based on age, lifestyle, and income.
Explanation:
At different ages people have different needs.
Comprehensive Problem- Chapter 4 Bas Baladi for the marketing of cooperative agricultural products is a company based in Ramallah. It operates two separate major divisions: Organic Food division, and Beverage division. On December 31, 2021, Bas Baladi had $327,000 operating Income. Required: a) Based on the below information (A-G). Use the following format to prepare the statement of comprehensive income. (Assume the tax rate is 20%) Note: Some of the items provided will not affect the statement of comprehensive income. A During 2021, the entity discovered that there's an error in the calculation of pension expense for 2020. The error overstated income before tax by $17,000. B Flood in Ramallah's farmland caused the company a loss of $11,000. They received insurance coverage of $6,500. Assume floods are common in Ramallah. C Bas Baladi decided to dispose of the Beverage division at the beginning of 2021. The Beverage division recognized a loss from operations of $150,000 before tax for the year ended 31 December 2021. The division was sold for $1,000,000, while the carrying value of the division's assets was $900,000. D In 2020 Bas Baladi purchased 10,000 shares of Padico stock at $1.2 per share. The stocks were categorized as a trading security. During 2021, the company received cash dividends of $0.05 per share. E Until 2021, the company has used weighted average, and on January 1, 2021. It has decided to switch to FIFO. The cumulative effect of this change is $60,000 before tax. F. The company suffered a $10,000 loss before tax from foreign currency translation of its subsidiary's financial statements. G Minority interest in net income amounted to $22,480.
Answer:
Explanation:
Statement of Comprehensive Income
For the year ended December 31, 2021
Net income:
Operating income $327,000
Adjustment for error in pension expense (17,000)
Loss from flood (4,500)
Loss from disposal of Beverage division (150,000)
Gain from sale of Beverage division 100,000
Cumulative effect of change in accounting principle (60,000)
Loss from foreign currency translation (10,000)
Total comprehensive income $131,000
Tax Expense (20%* $131,000) $26,200
Net income after tax $104,800
Minority interest in net income $22,480
Net income attributable to owners $82,320
Note:
-A: Error in pension expense, overstated income before tax by $17,000
-B: Flood in Ramallah caused a loss of $11,000, Insurance coverage received $6,500
-C: Beverage division recognized a loss from operations of $150,000 before tax, The division was sold for $1,000,000, Carrying value of the division's assets was $900,000
-D: Purchased 10,000 shares of Padico stock at $1.2 per share, classified as trading security, received cash dividends of $0.05 per share
-E: Change in accounting principle from weighted average to FIFO, cumulative effect $60,000 before tax
-F: Loss from foreign currency translation of subsidiary's financial statements $10,000
-G: Minority interest in net income $22,480
It's worth noting that the above statement is showing the comprehensive income, which is an important way of presenting the financial results of a company, as it includes all the transactions and events, whether or not they are included in the company's net income, or whether or not they are reported in the company's statement of financial position.
Choose from the option list provided the procedure the auditor could implement to test the operating effectiveness of the internal control for each of the following situations. Each choice may be used once, more than once, or not at all.
1. To determine that all credit sales transactions of an entity are recorded.
2. To detect a failure to post invoices to customers' accounts ledger.
3. To detect failure to invoice a shipment.
4. To ensure sales orders are properly authorized.
5. To determine goods sent to customers are based only on authorized sales orders.
6. To verify the completeness of cash receipts for cash sales at a retail outlet
7. To ensure cash receipts are deposited.
Answer:
Note: Missing word (list) are attached as picture below
1. To determine that all credit sales transaction of an entity are recorded
Procedure to implement: Match pre-numbered shipping documents with entries in sales journal.
2. To detect a failure to post invoice to customer account ledger
Procedure to implement: Trace Sales invoices to account receivable subsidiary ledger
3. To detect failure to invoice a shipment
Procedure to implement: Vouch bill of lading file to approved sales invoice
4. To ensure sales orders are properly authorized
Procedure to implement: Confirm sales orders were sent to the credit department
5. To determine goods sent to customers are based only on authorised sales order
Procedure to implement: Match bill of lading file to approved sales order
6. To verify the completeness of cash receipts for cash sales at a retail outlet
Procedure to implement: Observe consistency of employee's use cash registers and tapes
7. To ensure cash receipts are deposited
Procedure to implement: Compare daily cash receipts total with bank deposits
What type of tort action requires proof of fault?
A. Ultrahazardous activity
B. Strict liability
C. Negligence
D. Intentional tort
Answer:
C Negligence
Explanation:
Negligence is the most common basis for a civil tort claim. It alleges the fault of the defendant based on four elements: duty, breach of duty, causation and damages.
Answer:
Negligence
Explanation:
The reason is because Negligence requires proof of fault or evidence to make a party liable. Without evidence to show proof of fault, the tort action required is no longer negligence. However, in this case the answer still remains as negligence.
Companies often require non-disclosure agreements from their employees because a non-disclosure agreement
allows the employer to release private information about employees if necessary
identifies all the different ways an employee could violate company policies
maintains employee trust, which is needed for productivity and therefore profitability
provides for a documented exchange of information between employees and employers
A non-disclosure agreement (NDA) is a legally binding contract that establishes a confidential connection. The signatory(s) declare that they will not share any private information they may gather with outside parties. As a result, choice (B) is acceptable.
What is non-disclosure agreement (NDA)?Companies regularly utilize non-disclosure agreements while engaging in discussions with other businesses. They provide the parties the ability to communicate privately without being concerned that their competitors will learn about it. In this case, it might be referred to as a mutual non-disclosure agreement.
It is common for the NDA to be signed before any discussions between companies about potential joint ventures.
NDAs are commonly requested of employees in order to protect a company's confidential business information.
Hence, option (B) is accurate.
Learn more about non-disclosure agreement , from:
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Before computerization or data analytics, how would you companies find that they had duplicate payments?
Answer:
Before computerization or data analytics, companies would have had to manually review their payment records and invoices to identify duplicate payments.
Explanation:
This would involve manually checking for discrepancies in amounts, payment dates, and other key data points. This process was time consuming and error-prone, but necessary to ensure that the company was not double paying for goods or services.
Consider a bond selling at par with modified duration of 12 years and convexity of 265. A 1% decrease in yleld would cause the price to Increase by 12%, according to the duration rule. What would be the percentage price change according to the duration- with-convexity rule?
a. 21.2%
b. 13.3%
c. 25.4%
d. 17.0%
Answer:
b. 13.3%
Explanation:
Calculation to determine What would be the percentage price change according to the duration- with-convexity rule
Using this formula formula
∆P/P = -D*∆y + (1/2) * Convexity * (∆y)^2
Let plug in the formula
∆P/P = -12 * -.01 + (1/2) * 265 * (.01)^2
∆P/P = .12 + .01325
∆P/P = .13325*100
∆P/P=13.3%
Therefore What would be the percentage price change according to the duration- with-convexity rule is 13.3%
The first year of operations for a company was Year 1. The net income for Year 1 was $20,200 and dividends of $12,100 were paid. In Year 2, the company reported net income of $34,200 and paid dividends of $5,100. At the end of Year 1, the company had total assets of $152,000. At the end of Year 2, the company had total assets of $ $242,000. What is the amount of retained earnings at the end of Year 2
Answer:
$37,200
Explanation:
The amount of retained earnings is calculated by using the formula below;
Amount of retained earnings = Net income - Dividends paid
In year 1, the amount of retained earnings
= $20,200 - $12,100
= $8,100
In year 2, the amount of retained earnings
= $34,200 - $5,100
= $29,100
Therefore, the amount of retained earnings at the end of year 2
= Amount of retained earnings for year 1 + Amount of retained earnings for year 2
= $8,100 + $29,100
= $37,200
Joint-cost allocation, insurance settlement Quality Chicken grows and processes chickens. Each chicken is disassembled into five main parts. Information pertaining to production in July 2009 is:
Wholesale Selling Price per Pound
Parts Pound of Product When Production Is Complete
Joint cost of production in July 2009 was $50.
A special shipment of 40 pounds of breasts and 15 pounds of wings has been destroyed in a fire. Quality Chicken’s insurance policy provides reimbursement for the cost of the items destroyed. The insurance company permits Quality Chicken to use a joint-cost-allocation method. The splitoff point is assumed to be at the end of the production process.
1. Compute the cost of the special shipment destroyed using the following:
a. Sales value at splitoff method.
b. Physical-measure method (pounds of finished product).
2. What joint-cost-allocation method would you recommend Quality Chicken use? Explain.
Question Completion:
Sales Qty Sales
in Pound (A) Rate (B)
Breasts 100 $0.55
Wings 20 $0.20
Thighs 40 $0.35
Bones 80 $0.10
Feathers 10 $0.05
Answer:
Quality Chicken
1. The cost of the special shipment destroyed using the following:
a. Sales value at splitoff method:
Product Line cost of the special shipment destroyed
Breasts Wings Total
Qty Lost
(in Pound) 40 15 55
Joint cost Per Pound $0.34 $0.12
Cost of destroyed $13.50 $1.84 $15.34
b. Physical-measure method (pounds of finished product):
Product Line cost of the special shipment destroyed
Breasts Wings Total
Qty Lost
(in Pound) 40 15 55
Joint cost Per Pound $0.20 $0.20
Cost of destroyed $8.00 $3.00 $11.00
2. The sales value at split-off method is recommended. It assess different inventories according to their relative market values instead of their historical costs.
Explanation:
a) Data and Calculations:
Sales Qty Sales Sales value Joint Cost
in Pound Rate at Split-off Allocated
Breasts 100 $0.55 $55.00 $33.74 ($55/$81.50) * $50
Wings 20 $0.20 4.00 2.45 ($4/$81.50) * $50
Thighs 40 $0.35 14.00 8.59 ($14/$81.50) * $50
Bones 80 $0.10 8.00 4.91 ($8/$81.50) * $50
Feathers 10 $0.05 0.50 0.31 ($0.50/$81.50) * $50
Total 250 $81.50 $50.00
Joint Cost
Per Pound
Breasts $0.34 ($33.74/100)
Wings $0.12 ($2.45/20)
Thighs $0.21 ($8.59/40)
Bones $0.06 ($4.91/80)
Feathers $0.03 ($0.31/10)
Product Line cost of the special shipment destroyed
Breasts Wings Total
Qty Lost
(in Pound) 40 15 55
Joint cost Per Pound $0.34 $0.12
Cost of destroyed $13.50 $1.84 $15.34
Physical-Measure Method:
Breasts Wings Thighs Bones Feathers Total
Qty in Pound 100 20 40 80 10 250
Allocation of joint cost $20 $4 $8 $16 $2 $50
Weights 40% 8% 16% 32% 4% 100%
Cost per unit $0.20 $0.20 $0.20 $0.20 $0.20
Cost of Product destroyed:
Breasts = $8 ($0.20 * 40)
Wings = $3 ($0.20 * 15)
Total = $11
the graph at right shows the situation after the u.s. removes a tariff on imports of canned tuna.
A. C.
B. A+B+C+D.
C. A.
D. B+C+D.
Which area shows the loss in producer surplus?
A. B+C+D.
B. A+B.
C. A.
D. A+B+C+D.
Which area shows the loss in government tariff revenue?
A. A.
B. C.
C. A+B+C+D.
D. B+C+D.
Which areas show the reduction in deadweight loss?
A. B+C+D.
The graph that shows the situation when the U.S. removes a tariff on imports of canned tuna shows that the gain in consumer surplus is B. A+B+C+D.
The area which shows the loss of producer surplus is C. A.
The area which shows the loss in government tariff revenue is B. C.
The area showing a reduction in deadweight loss is B+D.
What happens when a tariffs are lifted ?When a tariff is lifted, the price of the good or service usually decreases, which increases consumer surplus. Consumers are able to purchase the same goods and services for a lower price, which results in a larger consumer surplus.
The price of the good or service usually decreases, which decreases producer surplus. Producers receive a lower price for the same goods and services, which results in a smaller producer surplus.
The government no longer receives revenue from that tax. Therefore, government revenue decreases when a tariff is lifted. The market becomes more efficient as the price of the good or service decreases, this leads to a decrease in deadweight loss.
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King Street Corporation has a pre-credit U.S. tax of $119,000 on $514,000 of taxable income. The company has $220,000 of foreign source taxable income and paid $74,000 of income taxes to the Italian government on this income. All of the foreign source income is treated as foreign branch income for foreign tax credit purposes. Calculate the company's foreign tax credit on its tax return will be: (Do not round intermediate calculations. Round your answer to nearest whole dollar amount.)
Answer:
King Street Corporation
The company's foreign tax credit on its tax return will be:
= $66,000.
Explanation:
a) Data and Calculations:
Pre-credit U.S. tax = $119,000
Taxable income = $514,000
Foreign source taxable income = $220,000
Foreign income taxes paid = $74,000
U.S income tax on the foreign taxable income = $66,000 ($220,000 * 30%)
b) The foreign tax credit is equal to the lesser of the foreign income taxes paid to the foreign government or the income tax payable on the foreign source taxable income.
XYZ Company allocates fixed overhead costs based on direct labor dollars, with an allocation rate of $5 per DL$. XYZ sells 1,000 units of product X per month at a price of $20 per unit. The variable costs are: direct materials $5/unit, direct labor $2/unit, and variable overhead $1/unit. Compute the profit margin per unit of product X Group of answer choices $10 per unit $10.75 per unit $12 per unit $13 per unit $2 per unit
Answer:
See below
Explanation:
Given that;
Price per unit = $20
Direct labor cost = $2
Direct material cost = $5
Overhead cost = $1
Fixed overhead allocation= $5 per direct labor cost = $5 × $2 = $10
Total expenses = $2 + $5 + $1 + $10 = $18
Therefore , profit margin
= Price per unit - Total expenses
= $20 - $18
= $2
How Goods Market will be in Equilibrium according to saving and investment approach
This method states that the equilibrium annual income is established at a level where planned saving (S) equals planned investment (I). If there is a difference in revenue from the market equilibrium, i.e., if it was planned.
What is a Market?A market is made up of various buildings, institutions, institutions, and processes that allow people to exchange goods and services.
The targeted savings graphs meet at the interest income in a satisfactory competitive equilibrium, or the wanted values of saves and investments are similar to both the absolute measurements of savings and investments as reported in the national income as well as product records and also the desired values.
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The employers who physically move inventory items for storage or shipment are called _____.
A.) Shipping clerks
B.) Receiving clerks
C.) Logisticians
D.) Materials Handlers
Answer:
Materials Handlers
The employers who physically move items for storage or shipment are known as the materials handlers. The materials handlers are those who have worked almost on their own. Hence, option D is appropriate.
Who are the Material handlers?The material handlers are tasked with the job to look after the materials or the commodities which are going to be supplied. These materials need to be taken into custody.
The task of the material handlers is to pull and check the products of the customers as well as the clients. Thus, by allowing the Quality Assurance of the product.
The Materials handlers also verify the productsby pulling up the inventory. Hence, option D is correct.
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Net Present Value Analysis [LO12-2] Windhoek Mines, Ltd., of Namibia, is contemplating the purchase of equipment to exploit a mineral deposit on land to which the company has mineral rights. An engineering and cost analysis has been made, and it is expected that the following cash flows would be associated with opening and operating a mine in the area:
Cost of new equipment and timbers $ 275,000
Working capital required $ 100,000
Annual net cash receipts $ 120,000
Cost to construct new roads in year three $ 40,000
Salvage value of equipment in four years $ 65,000
Receipts from sales of ore, less out-of-pocket costs for salaries, utilities, insurance, and so forth. The mineral deposit would be exhausted after four years of mining. At that point, the working capital would be released for reinvestment elsewhere. The company’s required rate of return is 20%. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables.
Required:
a. What is the net present value of the proposed mining project?
b. Should the project be accepted?
Answer:
NPV = $-56,153.55
The project should not be accepted because the NPV is negative
Explanation:
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
Only projects with a positive NPV should be accepted. A project with a negative NPV should not be chosen because it isn't profitable.
because it is the most profitable.
Cash flow in year 0 = $275,000 + $100,000 = $-375,000
Cash flow in year 1 = $ 120,000
Cash flow in year 2 = $ 120,000
Cash flow in year 3 = $ 120,000 - $40,000 = $80,000
Cash flow in year 4 = $ 120,000 + $65,000 = $185,000
I = 20%
NPV = $-56,153.55
The project should not be accepted because the NPV is negative
To find the NPV 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.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
On January 1 of this year, Barnett Corporation sold bonds with a face value of $500,000 and a coupon rate of 7 percent. The bonds mature in 10 years and pay interest annually on December 31. Barnett uses the effective-interest amortization method. Ignore any tax effects. Each case is independent of the other cases.
Complete the table below using the factors provided.
Case A (7%) Case B (8%) Case C (6%)
Cash received at issuance
Interest expense recorded in Year 1
Cash paid for interest in Year 1
Cash paid at maturity for bond principal
Answer:
Barnett Corporation
Table
Case A (7%) Case B (8%) Case C (6%)
Cash received at issuance $500,000 $466,449.59 $536,800.44
Interest expense recorded in Year 1 35,000 37,315.97 32,208.03
Cash paid for interest in Year 1 35,000 35,000 35,000
Cash paid at maturity for
bond principal $500,000 $500,000 $500,000
Explanation:
a) Data and Calculations:
Face value of bonds issued = $500,000
Coupon rate = 7% annually
Maturity period = 10 years
Case A (7%) Case B (8%) Case C (6%)
Cash received at issuance $500,000 $466,449.59 $536,800.44
Interest expense recorded in Year 1 35,000 37,315.97 32,208.03
Cash paid for interest in Year 1 35,000 35,000 35,000
Cash paid at maturity for
bond principal $500,000 $500,000 $500,000
Bonds Issuance At Par value At Discount At Premium
Cash received at issuance:
Case A (7%) Issued at par value
PV = Face Value/(1+0.07)^10
= $500,000/(1.07)^10
From an online calculator:
N (# of periods) 10
I/Y (Interest per year) 7
PMT (Periodic Payment) 35000
FV (Future Value) 500000
Results
PV = $500,000.00
Sum of all periodic payments $350,000.00
Total Interest $350,000.00
Interest expense for the first year = $35,000 ($500,000 * 7%)
Case B (8%) Issued at a discount
PV = Face Value/(1+0.08)^10
= $500,000/(1.08)^10
From an online calculator:
N (# of periods) 10
I/Y (Interest per year) 8
PMT (Periodic Payment) 35000
FV (Future Value) 500000
Results
PV = $466,449.59
Sum of all periodic payments $350,000.00
Total Interest $383,550.41
Interest expense for the first year = $37,315.97 ($466,449.59 * 8%)
Case C (6%) Issued at a premium
PV = Face Value/(1+0.06)^10
= $500,000/(1.06)^10
From an online calculator:
N (# of periods) 10
I/Y (Interest per year) 6
PMT (Periodic Payment) = 35000
FV (Future Value)
500000
Results
PV = $536,800.44
Sum of all periodic payments = $350,000.00
Total Interest $313,199.56
Interest expense for the first year = $32,208.03 ($536,800.44 * 6%)