Answer:
The company should use the weighted average method of process costing.
Explanation:
FIFO and Weighted average cost method are the two methods of Process costing. The company is already using the FIFO method for accounting of inventory under which cost are misappropriated into closing WIP.
To solve such issue, the company can use the weighted average method under which cost is calculated by weighted average and then evenly distributed to the unit transferred to other department and the ending work in process.
Example: Suppose company purchased goods lying stock 20000 units at $5 each. Weighted average cost calculated per unit is $3 per unit. Calculate Closing work in process
==> FIFO = 20000*5 = $100,000
==> Weighted average cost = 20000 * 3 = $60,000
On June 30, Joanna Fabrics has the following data pertaining to the retail inventory method. Goods available for sale: at cost $38,000; at retail $50,000; net sales $40,000; and ending inventory at retail $10,000. Compute the estimated cost of the ending inventory using the retail inventory method. The estimated cost of the ending inventory
Answer: 7600
Explanation:
The estimated cost of the ending inventory would be calculated as thus'
First, we have to calculate the cost to retail percentage which will be:
= cost/retail price
= 38000/50000
= 0.76
The cost of sales would be:
= net sales × cost to retail percentage
= 40000 × 0.76
= 30400
Then, the ending inventory would then be:
= 38000-30400
= 7600
The estimated cost of the ending inventory is $7,600.
First step
Cost to retail percentage= Cost/Retail price
Cost to retail percentage = 38000/50000
Cost to retail percentage = 0.76
Second step
Cost of sales= Net sales × Cost to retail percentage
Cost of sales= 40000 × 0.76
Cost of sales= 30400
Third step
Estimated cost of ending inventory=38,000-30,400
Estimated cost of ending inventory= 7,600
Inconclusion the estimated cost of the ending inventory is $7,600.
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Daley Company prepared the following aging of receivables analysis at December 31. Days Past Due Total 0 1 to 30 31 to 60 61 to 90 Over 90 Accounts receivable $ 630,000 $ 408,000 $ 102,000 $ 48,000 $ 30,000 $ 42,000 Percent uncollectible 1 % 2 % 5 % 7 % 10 % Exercise 7-9 Percent of receivables method LO P3 a. Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 6% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method. b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $13,200 credit. c. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $2,200 debit.
Answer:
A. $14,820
B. Dr Bad Debt Expense $1,620
Cr Allowance for Doubtful Accounts $1,620
C. Dr Bad Debt Expense $17,020
Cr Allowance for Doubtful Accounts $17,020
Explanation:
a. Calculation to Estimate the balance of the Allowance for Doubtful Accounts
Using this formula
Balance of the Allowance for Doubtful Accounts=Account Receivable *Percentage Uncollectible
Let plug in the formula
Account Receivable* Percentage Uncollectible = Balance of the Allowance for Doubtful Accounts
Not due $408,000*1%=$4,080
1 to 30 $102,000*2%=$2,040
31 to 60 $48,000*5%=$2,400
61 to 90 $30,000*7%=$2,100
Over 90 $42,000*10%=$4,200
Balance of the Allowance for Doubtful Accounts $14,820
($4,080+$2,040+$2,400+$2,100+$4,200)
b. Preparation of the adjusting entry to record Bad Debts Expense
Dr Bad Debt Expense $1,620
($14,820-$13,200)
Cr Allowance for Doubtful Accounts $1,620
(Being to record Bad Debts Expense)
c. Preparation of the adjusting entry to record bad debts expense
Dr Bad Debt Expense $17,020
($14,820+$2,200)
Cr Allowance for Doubtful Accounts $17,020
(Being to record Bad Debts Expense)
A company has3process options with the following costs:Process OptionsABCfixed cost ($)1,200,000220,000580,000variable cost/unit ($)31371)Find the range of forecasted volumes where process Cis optimal.2)The Point of Indifference between Process A and Process Boccurs at a total costof $________.3)The company has chosen process Aand expects to operate at a lossuntil 30,000 units have been sold.What is the price for each unit s
Answer: See explanation
Explanation:
a. First and foremost, we have to get the total cost equations which will be:
Total cost (A) = 1200000 + 3Q
Total Cost (B) = 220000 + 13Q
Total Cost (C) = 580000 + 7Q
To get the range of forecasted volumes where process C is optimal, we have to get the cross-over point between A, B and C which goes thus:
Between A and C will be:
= (1200000 - 580000)/(7 - 3)
= 620000/4
= 155,000
Between B and C will be:
= (220000 - 580000)/(7 - 13)
= 360,000 / 6
= 60,000
Therefore, the range of the forecasted volumes where process C is optimal will be [60000, 155000]
(b) The point of indifference between A and B will be the difference in their fixed cost divided by the difference in their variable cost which will be:
= (1200000 - 220000)/(13 - 3)
= 980,000 / 10
= 98,000
(c) The price for each unit will be:
30,000 = 1200,000 / (Selling price - 3)
Selling price - 3 = 1200,000 / 30,000
Selling price - 3 = 40
Selling price = 40 + 3
Selling price = $43
What is the value of a building that is expected to generate fixed annual cash flows of $13,800 every year for a certain amount of time if the first annual cash flow is expected in 3 years from today and the last annual cash flow is expected in 8 years from today and the appropriate discount rate is 6.8 percent
Answer:
the present value is $58,026
Explanation:
The computation of the value of the building is shown below
Present value = Cash flows × Present value of discounting factor( interest rate%,time period)
= $13,800 ÷ 1.068^3 + $13,800 ÷ 1.068^4 + $13,800 ÷ 1.068^5 + $13,800 ÷ 1.068^6 + $13,800 ÷ 1.068^7 + $13,800 ÷ 1.068^8
= $58,026
Hence, the present value is $58,026
Johnson Company uses the allowance method to account for uncollectible accounts receivable. Bad debt expense is established as a percentage of credit sales. During the year, net credit sales totaled $600,000, and the estimated bad debt percentage is 2%. The allowance for uncollectible accounts had a credit balance of $5,600 at the beginning of the year and $4,700, after adjusting entries, at the end of the year. What is the amount of accounts receivable written off during the year
Answer:
$12,900
Explanation:
Calculation for the amount of accounts receivable written off during the year
Beginning Balance $5,600
Add Bad debt expense $12,000
(2% x $600,000)
Less End-of-year balance ($4,700)
Accounts receivable written off $12,900
($5,600+$12,000+$4,700)
Therefore the amount of accounts receivable written off during the year will be $12,900
As the use of the Internet grows around the world, there must be as easy an exchange of ideas and information as possible between countries. One important issue is opt-in versus opt-out. In general, European websites have opt-in policies while U.S. websites have opt-out policies. Opt-in means customers must ask to be involved in data collection and marketing while opt-out companies automatically include customers in data collection unless the customer specifically asks not to be included. Europeans believe it is unethical to invade someone's privacy. Americans are not nearly as protective of their right to privacy. What ethical factor is illustrated by this example
Answer: Societal culture and norms
Explanation:
Based on the information given, the ethical factor that is illustrated by this example is "societal culture and norms".
Culture simply refers to the way of life with regards to certain group of people. It has to do with the ideas, attitudes and the values that such people have in the group.
With culture, one can be able to make a distinction between rights from wrongs. Therefore, Europeans believing it is unethical to invade someone's privacy and Americans are not nearly as protective of their right to privacy has to do with societal culture and norms.
What kind of economy uses a free-enterprise system?
Answer:
The U.S. economy is a free enterprise system.
Explanation:
That means that individuals — and not the government — own most of our country's resources.
A "direct response" social media advertisement offers a 50% discount at your restaurant for one of two people dining
together as a couple on Valentine's Day. The discount will apply to the lower priced
meal. One meal will cost $24.77 and the other costs
$22.56. What will the total cost of the check be with the discount?
a) $24.77
b) $34.95
c) $36.05
d) $47.33
Answer:
36.05
Explanation:
$22.56/2=11.28
$11.28+24.77=$36.05
Explain the relationship between a firm’s short-run production function and its short-run cost function. Focus on the marginal product of an input and the marginal cost of production.
Answer:
Short-run Production Function and Short-run Cost Function
In the short-run, some costs are fixed while others are variable. This is not the case in the long-run because, in the long-run, all costs become variable.
Therefore, the relationship between a firm’s short-run production function and its short-run cost function is depicted by the variability of the cost and the quantity of production in the short-run, when some costs are variable while other costs are fixed.
This implies that the quantity that the firm can produce in the short-run is determined by the variable (marginal) cost of production input. Similarly, the total variable cost of a product is a function of the quantity and the marginal cost per unit.
Explanation:
The short-run production function shows the different volumes of output that a firm can produce, where some costs are fixed and some are variable. This function is expressed as Q = f (L, K), where Q = quantity of production, L = labor input, and K = capital input. Here, the firm assumes that labor input is variable while capital input is fixed. This implies that the marginal cost of the product is equal to the labor cost. Therefore, if the firm employs one more unit of labor, it results in a marginal increase in the units of production. The marginal cost of production is expressed as a function of the change in the total cost divided by the change in the quantity.
The relationship between the Firm's short-run production and cost function is that they help a firm to make suitable adjustments in its production approach to achieve the cost efficiency.
In short-run of production, some costs are fixed while others are variable. However, in long-run of production, all costs become variable.
In the short-run production function, the firm employs two inputs which is labor and capital
Since the firm is operating in a short-run production period, the relationship can be seen through the production function and cost function assuming that the firm uses a certain level of technology.
in the short-run production function, it is assumed that firm utilize state-of-the-art technology in the production process.
In conclusion, the relationship between the Firm's short-run production and cost function is that they help a firm to make suitable adjustments in its production approach to achieve the cost efficiency.
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Crane Company, a computer services company, entered into these transactions during May 2017, its first month of operations.
1. Stockholders invested $32,000 in the business in exchange for common stock of the company.
2. Purchased computers for office use (recorded as Equipment) for $26,600 from Ladd on account.
3. Paid $5,500 cash for May rent on storage space.
4. Performed computer services worth $18,400 on account.
5. Performed computer services for Wharton Construction Company for $5,300 cash.
6. Paid Western States Power Co. $8,500 cash for energy usage in May.
7. Paid Ladd for the computers purchased in (2).
8. Incurred advertising expense for May of $1,800 on account.
9. Received $10,200 cash from customers for contracts billed in (4).
Using the following tabular analysis, show the effect of each transaction on the accounting equation. Put explanations for changes to revenues or expenses in the far right column.
Assets Liabilities Stockholders Equity
Cash + Accounts + Equipment = Accounts + Common + Retained Earnings
Receivable Payable Stock Revenue Expenses
Using the following tabular analysis to show the effect of each transaction on the accounting equation is as follows:
Assets = Liabilities + Stockholders Equity
No. Cash + Accounts + Equipment = Accounts + Common + Retained
Receivable Payable Stock Earnings
Revenue Expenses
1. $32,000 $32,000
2. $26,600 $26,600
3. -$5,500 -$5,500
4. $18,400 $18,400
5. $5,300 $5,300
6. -$8,500 -$8,500
7. -$26,600 -$26,600
8. $1,800 -$1,800
9. $10,200 -$10,200
$6,900 $8,200 $26,600 $1,800 $32,000 $23,700 -$15,800
Summary of transactions:Total Assets = $41,700 ($6,900 + $8,200 + $26,600)
Liabilities = $1,800
Common Stock = $32,000
Net Income = $7,900 ($23,700 -$15,800)
Total liabilities and equity = $41,700
Transaction Analysis:1. Cash $32,000 Common stock $32,000
2. Equipment $26,600 Accounts Payable (Ladd) $26,600
3. Rent expenses $5,500 Cash $5,500
4. Accounts Receivable $18,400 Service Revenue $18,400
5. Cash $5,300 Service Revenue $5,300
6. Utility expense $8,500 Cash $8,500
7. Accounts Payable (Ladd) $26,600 Cash $26,600
8. Advertising Expense $1,800 Accounts Payable $1,800
9. Cash $10,200 Accounts Receivable $10,200
Thus, the accounting equation remains in the balance after each transaction.
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Biarritz Corp. is growing quickly. Dividends are expected to grow at a rate of 30 percent for the next three years, with the growth rate falling off to a constant 7 percent thereafter. The required return is 13 percent and the company just paid a dividend of $2.60. What are the dividends each year for the next four years
Answer:
current dividends are $2.60
in one year, the dividends will be = $2.60 x 1.3 = $3.38
in two years, the dividends will be = $3.38 x 1.3 = $4.39
in three years, the dividends will be = $4.944 x 1.3 = $5.71
in four years, the dividends will be = $5.7122 x 1.07 = $6.11
during the next 3 years, dividends grow at 30%, but the during the fourth year they will only grow at 7%
Navistar Electric issued 1000 debenture bonds 2 years ago with a face value of $5,000 each and a bond interest rate of 15% per year payable semiannually. The bonds have a maturity date of 20 years from the date they were issued. If the interest rate in the market place is 10% per year compounded semiannually, determine the present worth today of one bond.
Answer:
$7,081.25
Explanation:
Face value = 5000
Coupon = 15% paid annually. Semi annual payment = 750/2 = 375
Time to maturity = 18 years
Interest rate = 10% compounded semi-annually
P = 375(P|A, 5%, 36) + 5000(P|F, 5%, 36)
P = 375(16.58131488) + 5000(0.17265193)
P = 6217.99308 + 863.25965
P = 7081.25273
P = $7,081.25
So, the present worth of one bond today is $7,081.25
Name and describe three ways that companies can benefit from being ethical.
As an investor, what is the risk involved when investing in companies on the stock
exchange?
a. Investors can lose their existing shares if the value of the stock does not
increase within 90 days of purchase
b. Once they purchase a share, investors cannot sell them at a higher price
The price of stocks can decrease; for example, when the company
receives bad press
d. Investors are only at risk if the purchase a share when the stock price has
fallen
C.
Answer:d
Explanation:
The investor are only at risk if the purchase of a share when the stoc price has fallen
Although appealing to more refined tastes, art as a collectible has not always performed so profitably. Assume that in 2015, an auction house sold a statute at auction for a price of $10,710,500. Unfortunately for the previous owner, he had purchased it in 2010 at a price of $12,738,500. What was his annual rate of return on this sculpture
Answer:
-3.41%
Explanation:
The computation of the annual rate of return is shown below;
We use the formula:
Future value = Present value × (1 + rate of interest)^number of years
$10,710,500 = $12,738,500 × (1 + rate of interest)^5
($10,710,500 ÷ $12,738,500)^(1 ÷ 5) = (1 + rate of interest)
(1 + rate of interest) = 0.965913622
r = (0.965913622 - 1) × 100
= -3.41%
An unacceptable treatment for the presentation of current liabilities is: A : Listing current liabilities according to amount. B : Showing current liabilities immediately below current assets to obtain a presentation of working capital. C : Offsetting current liabilities against assets that are to be applied to their liquidation. D : Listing current liabilities in order of maturity.
Answer:
The answer is c!
Explanation:
The security market line (SML) is:__________
a) the line that represents the expected return-beta relationship.
b) All of the options.
c) also called the capital allocation line.
d) the line that describes the expected return-beta relationship for well-diversified portfolios only.
e) the line that is tangent to the efficient frontier of all risky assets.
Answer: a) the line that represents the expected return-beta relationship
Explanation:
The security market line simply refers to a line that is drawn on a chart and it is simply a representation of capital asset pricing model as it shows the expected return-beta relationship.
The graphical representation depicts the risk of the securities, against their expected return. Therefore, the correct option is A.
What are 2 ways to add a customer to QuickBooks Online?
Answer:
-go to sales
-select the cutomers tab
Explanation:
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Azule Co. manufactures in two sequential processes, cutting and binding. The two departments report the information below for a recent month. Cutting Binding Beginning work in process Transferred in from cutting dept. $ 2,200 Direct materials $ 1,145 2,646 Conversion 3,750 3,450 Costs added during March Direct materials $ 9,240 $ 7,100 Conversion 14,700 18,575 Transferred in from cutting dept. 20,530 Transferred to finished goods 49,000 Determine the ending balances in the Work in Process Inventory accounts of each department.
Answer:
Cutting $8,305
Binding $365
Explanation:
Calculation to Determine the ending balances in the Work in Process Inventory accounts of each department.
Cutting Ending work in process =$ 1,145+ 3,750+$ 9,240+$14,700-$20,530
Cutting Ending work in process =$8,305
Therefore the ending balances in the Work in Process Inventory accounts for cutting department will be $8,305
Binding Ending work in process= $2,200+$2,646+$3,450+$7,100+$18,575+$20,530-$49,000
Binding Ending work in process= $365
Therefore Therefore the ending balances in the Work in Process Inventory accounts for binding department will be $365
the federal government has Group of answer choices separate capital and operating budgets only a capital budget an operating budget only a single budget that includes both operating expenses and capital spending
Answer:
A single budget that includes both operating expenses and capital spending.
Explanation:
A budget can be defined as a financial plan used for the estimation of revenue and expenditures of an individual, organization or government for a specified period of time, often one year. Budgets are usually compiled, analyzed and re-evaluated on periodic basis.
In the preparation of a budget, a list of each type of income and expense with respect to the budget is generally considered to be the first step. Also, the final step is making necessary adjustments to the budget by the top executive.
The federal government has a single budget that includes both operating expenses and capital spending on a cash basis.
Additionally, the benefits of having a budget is that it aids in setting goals, earmarking revenues and resources, measuring outcomes and planning against contingencies.
volume_upclosed_captiondescriptionfullscreen Leaders at Cold Stone Creamery say they launched stores in Japan because Japanese consumers have Western brand awareness that enables them to comprehend the American ice cream experience. The leaders are making a case that:
Answer:
d.Japanese consumers have schemas and prototypes against which they can positively evaluate and comprehend Cold Stone Creamery.
Explanation:
Japanese consumers have schemas and prototypes against which they can positively evaluate and comprehend Cold Stone Creamery.The prototype is regarded as mental frameworks which is been utilized in assignment of things into categories based on quality.
A total of $54,000 is borrowed and repaid with 48 monthly payments, with the first payment occurring one month after receipt of the $54,000. The stated interest rate is 8.50% compounded quarterly. What monthly payment is required
Answer: $1,329.40
Explanation:
First convert the annual interest rate which is compounded quarterly to an effective rate per period.
effective rate = (1 + annual rate/ no of compounding periods) ^ (number of compounding periods/ no. of periods) - 1
= (1 + 8.5%/4) ⁴ ⁺ ¹² - 1
= 0.703%
The monthly payments are constant so this is an Annuity.
Present value of Annuity = Annuity * (1 - ( 1 + r) ^ -n) / r
54,000 = Annuity * ( 1 - (1 + 0.703%)⁻⁴⁸) / 0.703%
54,000 = Annuity * 40.6205
Annuity = 54,000 / 40.62
Annuity = $1,329.40
The classic supply chain approach has been based on
forecasting which of the following parts of future
inventory using statistical trending?
Transfer
Demand
olololo
Lifecycle
Safety stock
Answer:
Demand
Explanation:
The classic supply chain approach statistics refers to data regarding past suppliers or sales through the distribution channels. A business can use this information to analyze sales trends. Once the sale trends are determined, future demand for products can be estimated. The business uses historical data from its supply chain to predict future sales and demand.
The cost of lighting and maintaining the tallest smokestack in the US (at a shuttered ASARCO refinery) is $90,000 per year. At an interest rate of 10% per year, the present worth of maintaining the smokestack for 10 years is closest to: a. $1,015,000 GE 311 Financial Decisions in Engineering Skill Development Assignment
Answer:
$553,000
Explanation:
Calculation for the present worth of maintaining the smokestack for 10 years
Present worth=$90,000(P/A,10%,10)
Present worth= $90,000(6.144567)
Present worth= $553,011.04
Present worth=$553,000 (Approximately)
Therefore the present worth of maintaining the smokestack for 10 years is closest to:$553,000
When determining whether you NEED to file a federal tax return, each of these questions matters EXCEPT...
1.What state do you live in?
2.How much income did you earn this year?
3.What type of income did you earn this year?
4.Are you claimed as a dependent on anyone else's tax return?
A- The state you live in should not hold importance when filing the income tax return. The all other options are required to be filed as they are important to determine the tax slabs and deductions a person may get.
Suppose two persons earn exactly same income in a particular year and both the people belong to a different state, in such case both the person will be liable for equal taxation.
While filing an income tax return, there are various things that need to be disclosed so as to determine what tax slabs a person belongs to and what are the deduction he may avail.The amount of income, the nature of income like income from salary/business or profession/house property/other sources and whether such person is taxable or not due to dependency on others needs disclosed. To conclude it doesn't matter which state a person belongs for the taxability of such person while filing an income tax return.Hence, the correct option is A that the the residency of state of such person will not matter for the purpose of filing his tax return.
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The broadcast news test advises corporate executives to _______. Multiple Choice Make certain that the things they do that are questionable do not end up on the front page of the newspaper or in the media to preserve the appearance of good ethics and meet the bottom line goal of profits Test all corporate policy by the standards of good publicity; that is, only do those things that will increase corporate bottom line profits by leading to good publicity Only do those things in secret that you would not mind becoming public, that is, showing up in the broadcast news All of the answer choices are correct
Answer: Make certain that the things they do that are questionable do not end up on the front page of the newspaper or in the media to preserve the appearance of good ethics and meet the bottom line goal of profits
Explanation:
The broadcast news test is simply defined as the approach taken in a company to ensure that it's employees are acting in an ethical manner.
The broadcast news test advises corporate executives to make certain that the things they do that are questionable do not end up on the front page of the newspaper or in the media to preserve the appearance of good ethics and meet the bottom line goal of profits.
g MM Proposition II with taxes: Group of answer choices reveals how utilizing the tax shield on debt causes an increase in the value of a firm. reaches the final conclusion that the capital structure decision is irrelevant to the value of a firm. supports the argument that the cost of equity decreases as the debt-equity ratio increases.
Answer:
reveals how utilizing the tax shield on debt causes an increase in the value of a firm.
Explanation:
According to the MM Proposition II with taxes, the value of a levered firm = Vu + tD
Where :
Vu = value of unlevered firm
tD = debt tax shield
In the presence of taxes, the value of a levered company is greater than that of the same company without debt with the same operating income.
Also, the WACC of a company with debt must be lower than that of an all equity company
On April 1 of the current year, Morgan Jones established a business to manage rental property. She completed the following transactions during April: Opened a business bank account with a deposit of $60,000 in exchange for common stock. Purchased office supplies on account, $1,800. Received cash from fees earned for managing rental property, $22,300. Paid rent on office and equipment for the month, $7,000. Paid creditors on account, $1,100. Billed customers for fees earned for managing rental property, $3,600. Paid automobile expenses for month, $750, and miscellaneous expenses, $1,000. Paid office salaries, $4,000. Determined that the cost of supplies on hand was $250; therefore, the cost of supplies used was $1,550. Paid dividends, $5,000. Required: 1. Indicate the effect of each transaction and the balances after each transaction: For those boxes in which no entry is required, leave the box blank. For those boxes in which you must enter subtractive or negative numbers use a minus sign. (Example: -300)
Answer:
I used an Excel spreadsheet, see the attached file
Explanation:
Smith Company exchanges assets to acquire a building. The market price of the Smith stock on the exchange date was $35 per share and the building's book value on the books of the seller was $250,000. Which of the following journal entries is correct for Smith Company when Smith issues 10,000 shares of $10 par value common stock and pays $20,000 cash in exchange for the building?
A) The common stock account increases by $100,000.
B) The building account increases by $370,000.
C) Stockholders' equity increases $350,000.
D) The additional paid-in capital account increases by $100,000.
Answer:
B) The building account increases by $370,000.
Explanation:
Since the per share value is $35
Also the 10,000 shares are issued at $10 and pays $20,000 in exchange of building
So the building account would be increased by
= 10,000 shares × $35 + $20,000
= $350,000 + $20,000
= $370,000
hence, the correct option is B.
Discuss what happens to overhead rates that are based on direct labor when automated equipment replaces direct labor. Would manufacturing overhead increase or decrease
Answer:
Manufacturing overhead rates based on direct labor will increase and the total overhead itself will increase as a result of the increased use of equipment instead of direct labor.
Explanation:
When overhead rates are based on direct labor and automated equipment replaces direct labor, the number of direct labor hours will decrease. This will cause an increase in the predetermined overhead rates since fewer direct labor hours will now divide the same or even an increased level of overhead. Even the overhead costs will increase from the replacement of direct labor with equipment.
