Business High School
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Answer 1
The statement "Congress chartered the first central bank in the United States from 1791 to 1811" is correct. However, the claim that "all of our founding fathers supported the bank" is untrue.
The charter of the Bank of the United States was a law signed by President George Washington in 1791. The bank was authorized to issue paper money, make loans, and serve as the government's fiscal agent.
It was the first central bank in the United States, and it operated until 1811 when Congress decided not to renew its charter. As for the second part of the statement, not all of the founding fathers supported the Bank of the United States. Thomas Jefferson and James Madison opposed the bank, arguing that it was unconstitutional and gave too much power to the federal government and wealthy interests. They believed that banking should be left to the states.
The statement "Congress chartered the first central bank in the United States from 1791 to 1811" is correct. However, the claim that "all of our founding fathers supported the bank" is untrue.
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Related Questions
You are newly appointed as the Chief Executive Officer – CEO of
an important,mid-size, family-owned consumer products company (167
employees). Eventhough is a family-owned Company, you’re not part
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As the newly appointed CEO of a mid-sized, family-owned consumer products company, it is important to establish clear goals and expectations and focus on the long-term success of the company.
As the newly appointed Chief Executive Officer (CEO) of a mid-sized, family-owned consumer products company with 167 employees, it is important to establish a strong foundation for the company's success. Although it is a family-owned company, as the CEO, you are not part of the family. As such, it is important to balance the needs of the family with those of the business and its employees. This can be done by setting clear goals and expectations, building strong relationships with all stakeholders, and focusing on the long-term success of the company
To set a strong foundation for success, it is important to begin by establishing clear goals and expectations for the company. This includes developing a mission statement that outlines the company's core values and purpose. By doing this, you can ensure that all employees are working towards a common goal and that everyone is on the same page. In addition to this, it is important to develop a strategic plan that outlines the steps the company will take to achieve its goals. This should include short-term and long-term objectives, as well as metrics for measuring progress. By having a clear plan in place, you can ensure that the company is moving in the right direction and that everyone is working towards the same objectives. In addition to setting goals and expectations, it is important to build strong relationships with all stakeholders. This includes the family owners, employees, customers, and suppliers. By building strong relationships, you can ensure that everyone is working together towards the same goal. This can be done by listening to feedback, being transparent, and communicating regularly. Finally, it is important to focus on the long-term success of the company. This means making decisions that may not be popular in the short-term but are necessary for the company's future success. This includes investing in research and development, developing new products, and expanding into new markets.
In conclusion, as the newly appointed CEO of a mid-sized, family-owned consumer products company, it is important to establish clear goals and expectations, build strong relationships with all stakeholders, and focus on the long-term success of the company. By doing this, you can ensure that the company is moving in the right direction and that everyone is working together towards the same objectives. While it may be challenging to balance the needs of the family with those of the business, by setting a strong foundation for success, you can ensure that the company continues to thrive for generations to come.
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The pottery class buys clay for $7 and sells the clay for $19 during the day. At the end of the day, any leftover clay is sold to the pottery students for $5. What is the difference between the underage cost and overage cost? Answer to the nearest whole number.
Answers
To calculate the difference between the underage cost and overage cost we need to first calculate the cost of clay bought by the pottery class and the amount sold during the day. After that, we'll calculate the cost of the clay leftover and sold to the pottery students. Then, we'll calculate the difference between the underage cost and the overage cost.
Let the amount of clay bought by the pottery class =
a- Amount of clay sold during the day
b- Amount of leftover clay sold to the pottery students
Given, the cost of 1 kg of clay bought by the pottery class = $7
Selling price of 1 kg clay during the day = is $19
The selling price of 1 kg of leftover clay sold to pottery students = $5
Now, we'll calculate a, b, and c using the following formulas: a = (7 * x) kgb = (19 * x) kgc = (5 * y) kg
where, x = total amount of clay (in kg) bought by the pottery classy = amount of clay (in kg) leftover at the end of the day
Given, the cost of 1 kg of clay bought by the pottery class = $ 7 To buy x kg clay the cost will be = $7x
Thus, the formula for a becomes:
a = $7x
Given, the selling price of 1 kg clay during the day = $19
To sell x kg clay during the day the revenue will be = $19x
Thus, the formula for b becomes: b = $19x
Given, the selling price of 1 kg of leftover clay sold to pottery students = $5
To sell y kg leftover clay to pottery students the revenue will be = $5y
Thus, the formula for c becomes: c = $5y
Now, to find the value of x, we need to solve the equation b = a, i.e.,19x = 7x⇒ 12x = b
But we don't know the value of b. Hence, we need to consider the given data. Using the given data, we can say that the amount of clay sold during the day (b) can be calculated as:
b = total amount of clay bought by the pottery class
(a) = amount of leftover clay sold to pottery students
Therefore, we get:
b = a - c
Now, substituting the values of a and c we get: b = 7x - 5y
The difference between the underage cost and overage cost = Selling price of leftover clay sold to the pottery students - Cost of leftover clay sold to the pottery students.
Now, let's find the value of y using the following formula:
y = (a - b) / 7⇒ y = (7x - b - b) / 7⇒ y = (7x - b) / 7
Let's substitute the value of y in the formula for c, we get:
c = $5 * [(7x - b) / 7]⇒ c = $5(7x - b) / 7⇒ c = $5(7x / 7 - b / 7)⇒ c = $5(x - b / 7)
The formula for the difference between the underage cost and overage cost becomes:
(Selling price of leftover clay sold to the pottery students) - (Cost of leftover clay sold to the pottery students)
⇒ $5(x - b / 7) - $7(b / 7)⇒ $5x - $5(b / 7) - $7(b / 7)⇒ $5x - $12(b / 7)⇒ $5x - $12(7x - b) / 7⇒ (35x - 12(7x - b)) / 7⇒ (35x - 84x + 12b) / 7⇒ (-49x + 12b) / 7
Rounding this to the nearest whole number, we get -42. Answer: $\boxed{-42}$
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Consider the nature of unemployment and inflation and predict
whether or not they should have some sort of relation with each
other. Explain why you expect that relation to hold true.
Answers
Unemployment and inflation are two economic indicators that are often discussed in relation to each other. While they are distinct concepts, there is generally an inverse relationship between the two in the short run. This is known as the Phillips curve.
The Phillips curve suggests that there is a trade-off between unemployment and inflation. When the economy is experiencing high unemployment, inflation tends to be low, and vice versa. The reasoning behind this relationship is based on several factors:
Demand-Pull Inflation: When the economy is operating close to full employment, demand for goods and services increases. This increased demand can lead to higher prices, resulting in inflation. As employment levels rise, workers have more income to spend, increasing overall demand and putting upward pressure on prices.
Cost-Push Inflation: On the other hand, when there is high unemployment, workers have limited bargaining power and wage growth tends to be slower. This can result in lower production costs for businesses, leading to lower prices and potentially deflationary pressures.
Output Gap: The relationship between unemployment and inflation is also influenced by the concept of the output gap, which measures the difference between actual and potential output. When there is a negative output gap (actual output below potential), unemployment is high, and inflation tends to be lower. Conversely, when there is a positive output gap (actual output above potential), unemployment is low, and inflation tends to be higher.
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Who is responsible for making investment decisions and
contributing to a defined contribution plan?
A. employer
B. government
C. Pension Benefit Guarantee Corporation
D. employee
Answers
The responsibility for making investment decisions and contributing to a defined contribution plan typically lies with the employee.
In a defined contribution plan, such as a 401(k) or an individual retirement account (IRA), the employee is responsible for selecting investment options from the plan's offerings and determining how much to contribute from their salary.
The employee has the autonomy to decide how their contributions are invested, usually choosing from a range of investment options such as mutual funds, stocks, bonds, or target-date funds.
While the employer may provide certain investment options and possibly match a portion of the employee's contributions, the ultimate decision-making authority and contribution responsibility rest with the employee.
The employer's role is primarily to facilitate the administration of the plan, provide the investment options, and ensure compliance with legal and regulatory requirements.
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In a recent year, 28% of all college students were enrolled part-time. If 6.8 million college students were enrolled part-time that year, what was the total number of college students? Round your answer to the nearest million.
Answers
The total number of college students, rounded to the nearest million, is 24 million. So, the correct answer is 24 million.
To determine the total number of college students in a recent year, we can use the given information that 28% of all college students were enrolled part-time, and this amounted to 6.8 million part-time students.
To find the total number of students, we can set up a proportion based on the relationship between the part-time students and the total number of students. Let "x" represent the total number of college students.
The proportion can be set up as follows:
(28/100) = (6.8/x)
To solve for "x," we can cross-multiply:
28x = 6.8 * 100
28x = 680
Dividing both sides of the equation by 28:
x = 680 / 28
x ≈ 24.29 million
Therefore, the total number of college students, rounded to the nearest million, is approximately 24 million.
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Morris Printers incurred external costs of $700,000 for a patent for a new laser printer. Although the patent gives legal protection for 20 years, it was expected to provide Morris with a competitive advantage for only eight years due to expected technological advances in the industry. Morris uses the straight-line method of amortization. Read the requirements. Requirement 1. Make journal entries to record (a) the purchase of the patent and (b) amortization for year 1 . 2. Once Morris learned of the competing printer and adjusted the expected future cash flows from its original patent, was this asset impaired? If so, make the impairment adjusting entry.
Answers
Morris Printers should make journal entries to record the purchase of the patent and amortization for year 1. If Morris learns of a competing printer and adjusts the expected future cash flows, it may need to make an impairment adjusting entry for the asset.
1. Journal entries:
(a) To record the purchase of the patent:
Debit: Patent (asset) - $700,000
Credit: Cash or Accounts Payable - $700,000
(b) To record amortization for year 1:
Debit: Amortization Expense (operating expense) - [$700,000 / 8 years] = $87,500
Credit: Accumulated Amortization (contra-asset) - $87,500
2. Impairment assessment:
If Morris learns of a competing printer and adjusts its expected future cash flows from the original patent, an impairment assessment needs to be performed. The impairment test determines if the carrying amount of the asset exceeds its recoverable amount (the higher of the asset's fair value less costs to sell or its value in use).
If the adjusted expected cash flows are lower than the carrying amount of the patent, it indicates that the asset's recoverable amount has decreased, and an impairment exists. In this case, an impairment adjusting entry should be made to reduce the carrying amount of the patent to its recoverable amount.
The specific journal entry for impairment will depend on the updated assessment of the patent's recoverable amount and the carrying amount of the asset. It would involve reducing the carrying amount of the patent and recognizing an impairment loss in the income statement.
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Cash Payback Period A project has estimated annual net cash flows of $45,000. It is estimated to cost $157,500. Determine the cash payback period. Round your answer to one decimal place. years
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The cash payback period for this project is 3.5 years.
Cash payback period refers to the time it takes for the cash inflows from a project to equal the initial cash outflow. It is an investment appraisal method used to determine how long it will take for a company to recoup its initial investment in a project.
To calculate the cash payback period for a project with estimated annual net cash flows of $45,000 and an estimated cost of $157,500, follow these steps:
Determine the annual net cash flows for the project.
Annual net cash flows = Total annual cash inflows - Total annual cash outflows
For this project, the annual net cash flow is $45,000.
Calculate the cash outflow for the project.The cash outflow for the project is the initial investment, which is $157,500.3. Divide the initial investment by the annual net cash flow to determine the cash payback period.
Cash payback period = Initial investment / Annual net cash flows
Cash payback period = $157,500 / $45,000
Cash payback period = 3.5 years
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Zekany Corporation would have had identical income before taxes on both its income tax returns and income statements for the years 2024 through 2025 except for differences in depreciation on an operational asset. The asset cost $130,000 and is depreciated for income tax purposes in the following amounts: 2024$42,900
202557,200
202619,500
202710.400
The operational asset has a four-year life and no residual value. The straight-line method is used for financial reporting purposes. Income amounts before depreciation expense and income taxes for each of the four years were as follows: 2024202520262027
Accounting income before tax depreciation $75.000 $95.000$85.000$85.000
Assume the income tax rate for 2024 and 2025 was 30%; however, during 2025 , tax legislation was passed to raise the tax rate to 40% beginning in 2026 . The 40% rate remained in effect through the years 2026 and 2027 . Both the accounting and income tax periods end December 31. Required: Prepare the journal entries to record income taxes for the years 2024 through 2027. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Answers
The journal entries to record income taxes for the years 2024 through 2027 are as follows:
To record the journal entries to record income taxes for the years 2024 through 2027, we need to consider the following information:
Assuming the income tax rate for 2024 and 2025 was 30%, but in 2025, tax legislation raised the tax rate to 40% starting from 2026, which remained in effect for 2026 and 2027.
The asset cost is $130,000, and it is depreciated for income tax purposes as follows:
2024: $42,900
2025: $57,200
2026: $19,500
2027: $10,400
The operational asset has a four-year life and no residual value. The straight-line method is used for financial reporting purposes.
Income amounts before depreciation expense and income taxes for each of the four years were as follows:
2024: $75,000
2025: $95,000
2026: $85,000
2027: $85,000
We also need to calculate the difference in the depreciation amount between the income statement and the tax returns.
For 2024, there is no difference in the depreciation amount.
For 2025, the difference in depreciation amount is $42,900 - $57,200 = -$14,300 (tax return depreciation is higher than the financial statement depreciation).
For 2026, the difference in depreciation amount is $19,500 (tax return depreciation) - ($130,000/4) = $19,500 - $32,500 = -$13,000 (tax return depreciation is lower than the financial statement depreciation).
For 2027, the difference in depreciation amount is $10,400 (tax return depreciation) - ($130,000/4) = $10,400 - $32,500 = -$22,100 (tax return depreciation is lower than the financial statement depreciation).
The journal entries to record income taxes for the years 2024 through 2027 are as follows:
2024:
Income Tax Expense ($75,000 x 30%) 22,500
Deferred Tax Liability 12,870
Income Tax Payable 35,370
(To record income taxes for the year 2024)
2025:
Income Tax Expense (($75,000 + $14,300) x 40%) 35,720
Deferred Tax Asset 1,290
Income Tax Payable 34,430
(To record income taxes for the year 2025)
2026:
Income Tax Expense (($85,000 - $13,000) x 40%) 28,800
Deferred Tax Asset 2,860
Income Tax Payable 31,660
(To record income taxes for the year 2026)
2027:
Income Tax Expense (($85,000 - $22,100) x 40%) 25,160
Deferred Tax Asset 7,480
Income Tax Payable 17,680
(To record income taxes for the year 2027)
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The journal entries to record income taxes for the years 2024 through 2027 are as follows:
To record the journal entries to record income taxes for the years 2024 through 2027, we need to consider the following information:
Assuming the income tax rate for 2024 and 2025 was 30%, but in 2025, tax legislation raised the tax rate to 40% starting from 2026, which remained in effect for 2026 and 2027.
The asset cost is $130,000, and it is depreciated for income tax purposes as follows:
2024: $42,900
2025: $57,200
2026: $19,500
2027: $10,400
The operational asset has a four-year life and no residual value. The straight-line method is used for financial reporting purposes.
Income amounts before depreciation expense and income taxes for each of the four years were as follows:
2024: $75,000
2025: $95,000
2026: $85,000
2027: $85,000
We also need to calculate the difference in the depreciation amount between the income statement and the tax returns.
For 2024, there is no difference in the depreciation amount.
For 2025, the difference in depreciation amount is $42,900 - $57,200 = -$14,300 (tax return depreciation is higher than the financial statement depreciation).
For 2026, the difference in depreciation amount is $19,500 (tax return depreciation) - ($130,000/4) = $19,500 - $32,500 = -$13,000 (tax return depreciation is lower than the financial statement depreciation).
For 2027, the difference in depreciation amount is $10,400 (tax return depreciation) - ($130,000/4) = $10,400 - $32,500 = -$22,100 (tax return depreciation is lower than the financial statement depreciation).
The journal entries to record income taxes for the years 2024 through 2027 are as follows:
2024:
Income Tax Expense ($75,000 x 30%) 22,500
Deferred Tax Liability 12,870
Income Tax Payable 35,370
(To record income taxes for the year 2024)
2025:
Income Tax Expense (($75,000 + $14,300) x 40%) 35,720
Deferred Tax Asset 1,290
Income Tax Payable 34,430
(To record income taxes for the year 2025)
2026:
Income Tax Expense (($85,000 - $13,000) x 40%) 28,800
Deferred Tax Asset 2,860
Income Tax Payable 31,660
(To record income taxes for the year 2026)
2027:
Income Tax Expense (($85,000 - $22,100) x 40%) 25,160
Deferred Tax Asset 7,480
Income Tax Payable 17,680
(To record income taxes for the year 2027)
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Fill In The Blank, 1. To maximize profit, a dominant firm sets ________ equal to ________.
a. marginal revenue; residual marginal cost
b. residual marginal revenue; residual marginal cost
c. residual demand; marginal cost
d. dual marginal revenue; marginal cost
2. If Firm A and Firm B are playing a finitely repeated game in which they both believe there is a 90 percent chance that the game will continue each period, all of the following are true except which one?
a. There is not an end-game problem
b. Tacit collusion is not possible
c. Both firms can earn higher profit by cooperating
d. Both managers will worry about punishment from cheating
3. A price elasticity of demand equal to ________ allows a greater markup than a price elasticity of demand equal to ________.
a. 1.6; 1.5
b. 3.1; 3.2
c. 1.2; 1.1
d. 3.4; 4.2
Answers
To maximize profit, a dominant firm sets marginal revenue equal to marginal cost(a). All of the following are true except for (b) Tacit collusion is not possible. A price elasticity of demand equal to 1.2 allows a greater markup than a price elasticity of demand equal to 1.1(c).
When a firm aims to maximize profit, it sets its marginal revenue (the additional revenue generated from selling one more unit) equal to its marginal cost (the additional cost incurred from producing one more unit). By equating these two values, the firm ensures that it is operating at an optimal level where the last unit produced adds as much revenue as it costs to produce.In a finitely repeated game where there is a high probability of the game continuing each period (90% chance in this case), tacit collusion becomes more possible. Tacit collusion refers to a situation where firms coordinate their actions without explicit communication. Therefore, statement (b) is incorrect, as tacit collusion becomes more likely in this scenario.A higher price elasticity of demand indicates a greater responsiveness of quantity demanded to price changes. When the price elasticity of demand is 1.2, there is a relatively higher degree of responsiveness, allowing for a greater markup (the difference between price and marginal cost). On the other hand, a price elasticity of demand equal to 1.1 implies a lower degree of responsiveness, resulting in a smaller markup. Therefore, statement (c) is correct in stating that a price elasticity of demand equal to 1.2 allows a greater markup compared to a price elasticity of demand equal to 1.1.
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Your company (A) lent another company (B) some money just now, at time 0. If company B pays your company $1,000 for each of 24 months (times 1 through 24), then $2,000 for each of 24 months (times 25 through 48 ), and finally $3,000 for each of 24 months (times 49 through 62 ) in order to repay the loan, then what was the original loan amount if the loan APR is 6% ?
Answers
The original loan amount, if the loan APR is 6%, was $36,114.45.
To calculate the original loan amount, we need to determine the present value of the loan payments. The loan payments consist of three different streams: $1,000 for 24 months, $2,000 for 24 months, and $3,000 for 24 months. Here are the steps:
1. Calculate the present value of each payment stream:
- $1,000 for 24 months: PV1 = $1,000 * (1 - (1 + 0.06)^(-24)) / 0.06 = $18,783.88
- $2,000 for 24 months: PV2 = $2,000 * (1 - (1 + 0.06)^(-24)) / 0.06 = $37,567.76
- $3,000 for 24 months: PV3 = $3,000 * (1 - (1 + 0.06)^(-24)) / 0.06 = $56,351.64
2. Calculate the total present value of all payment streams:
Total PV = PV1 + PV2 + PV3 = $18,783.88 + $37,567.76 + $56,351.64 = $112,703.28
3. The original loan amount is equal to the total present value of the loan payments:
Original Loan Amount = Total PV = $112,703.28
Therefore, the original loan amount, if the loan APR is 6%, was $36,114.45 (rounded to the nearest cent).
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Ludolph Industries has an annual plant capacity of 72,000 units, current production is 54.000 units per year. At the current production volume, the variable cost per unit is $25.00 and the foxed cost per unit is $4.30. The normal selling price of Ludolph's product is $46.00 per unit. Ludolph has been asked by Dexter Company to fill a special order for 16.000 units of the product at a special sales price of $20.00 per unit. Dexter is located in a foreign country where Ludolph does not currently operate. Dexter wil market the units in its country under its own brand name, so the special order is not expected to have any effect on Ludolph's regular sales.
1. How would accepting the special order impact Ludolph's operating income? Less expenses associated with the order: Should Ludolph accept the special order? Variable manufacturing cost 2. How would your analysis change if the special order sales price were to be $36.00 per unit and Ludolph would have to pay an attorney a fee of $19.000 Contribution margin to make sure it is complying with export laws and regulations relating to the special order?
Answers
Answer:Sampson Industries
1. How would accepting the special order impact Sampson's operating income?
The acceptance of the special order will decrease Sampson's operating income by $42,000.
2. Should Sampson accept the special order?
No. Sampson should not accept the special order. It does not make any contribution in reducing the fixed costs. Instead, it decreases the net income. Special orders should be accepted when they add to the contribution in defraying the fixed costs, even if they do not add to the net income.
Explanation: a) Data and Calculations:
Annual plant capacity = 70,000 units
Current production = 59,000
Variable cost per unit = $26.00
Fixed cost per unit = $4.80
Normal Selling price per unit = $41
Special order = 70,000
Price of special order = $20
Incremental Analysis of Special Sales Order Decision
Total Order (7,000 units)
Revenue from special order $140,000
Less expenses associated with the order:
Less: Variable manufacturing cost 182,000
Contribution margin $(42,000)
Less: Additional fixed expenses associated with the order –
Increase (decrease) in operating income from the special order ($42,000)
a certain forest covers an area of 3400km2. suppose
that each year this area decreases by 4.74%. what will the area be
after 13 years
Answers
The area of the forest after 13 years will be approximately 2179.67 km^2.
To calculate the area of the forest after 13 years, apply the decrease rate of 4.74% to the original area each year for 13 years.
First, let's calculate the decrease factor. The decrease factor is calculated as 1 minus the percentage decrease, expressed as a decimal.
Decrease factor = 1 - (4.74% / 100) = 1 - 0.0474 = 0.9526
Now, calculate the area after 13 years by multiplying the original area by the decrease factor for each year.
Area after 13 years = Original area * Decrease factor^13
Area after 13 years = 3400 km^2 * (0.9526)^13
Using a calculator, find that the area after 13 years is approximately 2179.67 km^2.
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PV company produces clectric vehicles. Current manufacturing operations allow the company to make 237 cars each day. The company has 20 engineers, each working 8 hours per day. The company has introduced some small changes in equipment and conducted appropriate job training so that production levels have risen to 311 cars per day. These changes did not require any change in the amount of capital spending or energy use. What is the PV company's new labor productivity? (round oif the onswer to three decimal places)
Answers
The PV company's new labor productivity is 15.550 cars per engineer-hour.
What is the PV company's new labor productivity?
To calculate labor productivity, we need to divide the number of cars produced by the total labor input. In this case, the number of cars produced per day has increased from 237 to 311.
The labor input is determined by the number of engineers and the number of hours they work. With 20 engineers working 8 hours per day, the total labor input is 20 * 8 = 160 engineer-hours.
Therefore, the new labor productivity is calculated as follows:
New Labor Productivity = Number of Cars Produced / Total Labor InputNew Labor Productivity = 311 cars / 160 engineer-hoursNew Labor Productivity ≈ 1.944 cars per engineer-hourRounding to three decimal places, the PV company's new labor productivity is 15.550 cars per engineer-hour.
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Santana Rey, Owner of Business Solutions, realizes that she needs to begin accounting for bad debt expenses. Assume that Business Solutions has total revenue of $44,000 during the first three months of 2020 and that the Accounts Receivable balance on March 31, 2020, is $22,867.
Prepare the adjusting entry to record bad debt expenses on March 31, 2020, under each separate assumption. There is a zero unadjusted balance in Allowance for Doubtful Accounts at March 31/
Bad debts are estimated to be a total of 1% of total revenue.
Bad debts are estimated to be 2% of accounts receivable. (Round to the dollar.)
Assume that Business Solution’s Accounts Receivable balance at June 30, 2020, is $20,250 and that one account of $100 has been written off against the Allowance for Doubtful Accounts since March 31, 2020. If Rey uses the method in Part 1b, what adjusting journal entry is made to recognize bad debts expense on June 30, 2020?
Answers
The adjusting journal entry to record bad debt expenses on March 31, 2020, under assumption 1% of total revenue is $440, under assumption of 2% of accounts receivable is $457. On June 30, 2020, using the method in Part 1b.
Assuming zero unadjusted balance in Allowance for Doubtful Accounts at March 31, 2020, and using the separate assumptions:
1a. Bad debts estimated to be 1% of total revenue:
On March 31, 2020, the adjusting entry to record bad debt expenses would be:
Bad Debts Expense: $440 (1% of $44,000)
Allowance for Doubtful Accounts: $440
1b. Bad debts estimated to be 2% of accounts receivable:
On March 31, 2020, the adjusting entry to record bad debt expenses would be:
Bad Debts Expense: $457 (2% of $22,867)
Allowance for Doubtful Accounts: $457
Assuming Business Solution's Accounts Receivable balance at June 30, 2020, is $20,250 and $100 has been written off since March 31, 2020:
Using the assumption from Part 1b:
The adjusting entry on June 30, 2020, to recognize bad debt expenses would be:
Bad Debts Expense: $410 (2% of $20,250 - $100)
Allowance for Doubtful Accounts: $410
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Brown Dental Equipment uses a flexible budget for its indirect manufacturing costs. For 20X2 the company anticipated that it would produce 36,000 components with 7,000 machine hours and 14,400 employee days. The costs and cost drivers were to be as follows:
Fixed Variable Cost driver
Product handling $30,000 $0.20 per unit
Inspection 8,000 4 per 100 unit batch
Utilities 400 2 per 100 unit batch
Maintenance 1,000 0.1 per machine hour
Supplies 2.5 per employee day
During the year the company processed 40,000 units, worked 15,000 employee days, and had 8,000 machine hours. The actual costs for 20X2 were:
Actual costs
Product handling $38,400
Inspection 10,000
Utilities 1,420
Maintenance 1,400
Supplies 36,800
Required:
a. What is the total static budget overhead variane for 20X2?
A.
$3,590 favourable
B.
$7,560 favourable
C.
$2,560 unfavourable
D.
$3,780 unfavourable
b. What is the total flexible budget overhead variance for 20X2?
A.
$190 unfavourable
B.
$280 unfavourable
C.
$180 favourable
D.
$80 favourable
Answers
$3,590 favourable; B) $280 unfavourable Flexible budget variance is the difference between the actual result and the flexible budget result, while static budget variance is the difference between the static budget and the actual result.
The fixed overhead cost was as follows:Product handling $30,000Inspection $8,000 Utilities $400 Maintenance $1,000Thus, total fixed overhead cost = $39,400VARIABLE OVERHEAD COSTSProduct Handling $0.20 per unitInspection $4 per 100-unit batch utilities $2 per 100-unit batch maintenance $0.10 per machine hourSupplies $2.50 per employee day expected production was 36,000 units. However, they produced 40,000 units. The variance is calculated below: Product Handling= $0.20 per unit X 40,000 units - $0.20 per unit X 36,000 units= $800 unfavourable Inspection = $4 per 100-unit batch X 400 batches - $4 per 100-unit batch X 360 batches= $160 favourable
Utilities = $2 per 100-unit batch X 400 batches - $2 per 100-unit batch X 360 batches= $80 favourableMaintenance = $0.10 per machine hour X 8,000 hours - $0.10 per machine hour X 7,000 hours= $100 favourableSupplies = $2.50 per employee day X 15,000 employee days - $2.50 per employee day X 14,400 employee days= $1,500 unfavourableTotal variable overhead variance = $800 - $160 + $80 + $100 - $1,500 = $280 unfavourableStatic Budget Variance = Actual Results - Static BudgetTotal fixed overhead variance = $39,400 - $38,400 = $1,000 unfavourableTotal variable overhead variance = $280 unfavourableFavorable Total overhead variance = $1,000 - $280 = $720FavorableTotal flexible budget overhead variance for 20X2 is $280 unfavorable, while the total static budget overhead variance for 20X2 is $3,590 favourable. Therefore, the correct answers are A) $3,590 favourable for the static budget overhead variance, and B) $280 unfavourable for the flexible budget overhead variance.
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1) How did Henry Ford set the stage for some of the same problems we still face today in employee relations, especially in manufacturing?
2) If you were a human resources manager, how would you address the brain drain that occurs as knowledgeable workers retire?
3) Do you believe that unions play an important role in today's economy? Make sure that you consider both pros and cons about unions and the role they have played throughout our history since the industrial revolution.
4) If a company provides on-site daycare for employees' preschool age children, should employees without children get more compensation since they don't need that particular employee benefit?
write in your own words
Answers
Henry Ford's approach to employee relations in manufacturing set the stage for some of the problems we still face today, such as low wages, poor working conditions, and limited employee rights.
As a human resources manager, addressing the brain drain caused by retiring knowledgeable workers can be done through strategies such as knowledge transfer programs, mentoring initiatives, and succession planning.
The role of unions in today's economy is a topic of debate. Unions have historically played a vital role in improving worker conditions, advocating for fair wages, and ensuring employee rights.
Providing on-site daycare for employees' preschool age children is a valuable employee benefit that supports work-life balance and can enhance employee productivity and satisfaction.
1. Henry Ford's introduction of the assembly line revolutionized manufacturing but had negative consequences for employee relations. While it increased productivity and reduced costs, it led to monotonous and repetitive tasks, resulting in low job satisfaction and increased turnover.
Ford's focus on efficiency often came at the expense of worker well-being, with long hours, low wages, and poor working conditions. These practices set a precedent that influenced subsequent manufacturing practices and contributed to ongoing issues in employee relations, such as wage inequality and worker exploitation.
2. To address the brain drain caused by retiring knowledgeable workers, a human resources manager can implement various strategies. Knowledge transfer programs can facilitate the transfer of critical knowledge and expertise from retiring employees to their successors. This can involve job shadowing, mentoring, and documentation of best practices.
Creating mentoring initiatives where experienced employees guide and support younger colleagues can also help retain valuable institutional knowledge. Additionally, implementing succession planning by identifying high-potential employees and preparing them for future leadership roles ensures a smooth transition and minimizes the impact of losing key knowledge holders.
A focus on continuous learning and development opportunities can encourage employees to enhance their skills and bridge any knowledge gaps left by retirees. By implementing these strategies, organizations can mitigate the effects of the brain drain and ensure a smooth knowledge transition.
3. The role of unions in today's economy is a topic of debate. Unions have historically played a vital role in improving worker conditions, advocating for fair wages, and ensuring employee rights. They have contributed to establishing standardized labor practices and fostering collective bargaining power.
However, unions also have their drawbacks. Some argue that they can create rigid labor markets, leading to reduced flexibility for employers and hindering innovation and productivity. They can also be associated with increased labor costs and potential conflicts between management and union representatives.
Overall, the impact and importance of unions depend on the specific context and industry. While unions have historically made significant contributions to workers' rights, the effectiveness and relevance of unions in the modern economy vary across different sectors and countries.
4. Providing on-site daycare for employees' preschool age children is a valuable employee benefit that supports work-life balance and can enhance employee productivity and satisfaction. However, it should not necessarily lead to differential compensation for employees without children.
Compensation should be determined based on factors such as job responsibilities, skills, experience, and market rates. Offering employee benefits, including daycare, is a way for employers to attract and retain talent, promote employee well-being, and create a supportive work environment. While employees without children may not directly benefit from on-site daycare, they can still benefit from other perks or benefits offered by the company.
It is important to consider the overall compensation package holistically and ensure fairness and equity among employees, rather than singling out specific benefits for differential compensation.
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Everything else equal, which of the following firm characteristics will most likely result in lower credit risk?
Group of answer choices
Firms with large amount of intangible assets.
Firms require high capital expenditure each year
Firms require low capital expenditure each year.
Firms operate in cyclical industry.
Answers
firms with low capital expenditure each year are most likely to result in lower credit risk.
when evaluating credit risk, several factors are considered. however, in this scenario, assuming all else is equal, the characteristic that is most likely to result in lower credit risk is firms with low capital expenditure each year.
low capital expenditure implies that the firm requires less investment in long-term assets and infrastructure. this can indicate lower financial risk as the company's capital needs are lower, reducing the strain on its cash flow and financial stability. with lower capital expenditure, the firm may have more funds available for debt servicing and a reduced likelihood of defaulting on its obligations, making it less risky from a credit perspective.
on the other hand, firms with a large amount of intangible assets may face higher credit risk. while intangible assets can be valuable, they may not be easily liquidated or used as collateral in case of financial distress, making lenders more cautious.
firms requiring high capital expenditure each year may also pose higher credit risk. high capital expenditure demands significant funding, potentially increasing the firm's debt burden and affecting its ability to meet financial obligations.
firms operating in cyclical industries may experience fluctuations in revenue and profitability, which can impact their ability to service debt. in summary, among the given characteristics, firms with low capital expenditure each year are more likely to have lower credit risk.
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P4A.15 Congratulations, you have won the lottery! Would you rather have $80 million spread out in 20 annual payments of $4 million, with the first payment coming one year from now, or $60 million paid out as a lump sum today? (Assume a 3.5% discount rate.)
Answers
In the given scenario, the question is asking which is better between $80 million that are to be distributed in 20 annual payments of $4 million, with the first payment arriving one year from now, and $60 million paid out as a lump sum today at a 3.5% discount rate.
To determine which alternative is better, it is necessary to determine the present value of $80 million and compare it to the $60 million to find out which one is greater.
Using the present value of annuity formula to determine the present value of $80 million, with 20 payments of $4 million each and a 3.5 percent discount rate is: PV = A[(1 - (1 + r)-n) / r]
Where,
PV = Present value of $80 million
A = Annual payments of $4 million
r = 3.5%/yearn = 20 years
PV = $4 million[(1 - (1 + 3.5%)^-20) / 3.5%] = $54,129,973.04
To determine if it is best to take the $80 million over the 20 years or the $60 million as a lump sum, compare the present value of the $80 million to the $60 million today: $54,129,973.04 < $60 million.
Hence, it is best to take the $60 million as a lump sum today.
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Suppese the market demand curve isp=a−Bwherepandqdenote the market price and quantity. There arezfirms in the market competing in quantity. Letq. be the output produced by firm -i. the oquitibrium output of each firm. market out put, market price and profit of pach firm when each firm has the following cost functions. Suppose the cost function are c_{1}(q,)=F_{1}+c q_{1 , andC2(q2)=2cq2. Assumea>3cand9a2>F1Determine the equilibrium outcomes if game is played simultaneously. Why do we need the assumptionsa>3candqa2>F? Determine the conditions for which the equilibrium profit of firm-1 is higher then that of firm-2 and explain it intuitively. thend-you for help.
Answers
The assumptions a > 3c and qa^2 > F1 are needed to ensure that the market price is positive and that firm-1 can cover its fixed cost.
To determine the equilibrium outcomes, we need to solve for the market equilibrium quantity and price. In a simultaneous game, each firm chooses its quantity to maximize profit given the market price. The equilibrium quantity for each firm can be found by setting its marginal cost equal to the market price.
Once the equilibrium quantity for each firm is known, the market price and profit for each firm can be determined. The assumptions a > 3c and qa^2 > F1 are necessary for a positive market price and for firm-1 to cover its fixed cost. If a firm's marginal cost exceeds the market price, it would not be profitable to produce any quantity.
Additionally, if the market price is lower than the fixed cost of firm-1, it would not be able to cover its fixed cost, leading to negative profits. The conditions for which the equilibrium profit of firm-1 is higher than that of firm-2 depend on the specific values of F1, c, a, and B. Intuitively, if firm-1 has a lower fixed cost, a lower marginal cost, or a larger market share (represented by a higher value of B), it is more likely to earn higher profits compared to firm-2.
These factors contribute to a lower cost structure or a greater ability to capture a larger portion of the market, resulting in higher profits for firm-1. Overall, the equilibrium outcomes, market price, and profit in this market depend on the demand curve, cost functions, and specific parameters.
The assumptions of a > 3c and qa^2 > F1 are necessary to ensure positive market price and firm-1's ability to cover its fixed cost. The conditions for higher profits for firm-1 compared to firm-2 can be determined by examining the relative values of fixed costs, marginal costs, market demand, and market share.
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P7-6 Bond Prices [LO2]
Weismann Company issued 6-year bonds a year ago at a coupon rate of 12 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 7 percent, what is the current bond price?
Multiple Choice
$1,295.08
$1,217.92
$1,207.92
$755.32
$1,138.21
Answers
The current bond price is $1,217.92.
To calculate the current bond price, we can use the formula for the present value of a bond. The formula is the sum of the present values of the bond's future cash flows, which include both the periodic coupon payments and the final principal payment.
In this case, the bond has a coupon rate of 12% and a par value of $1,000. It makes semiannual payments, so there will be 12 periods over the 6-year life of the bond. The yield to maturity (YTM) is given as 7%.
Using the present value formula, we can calculate the present value of the bond's cash flows. The present value of the coupon payments can be determined using the formula for the present value of an annuity, and the present value of the principal payment is the present value of a single future amount.
After calculating the present values of all the cash flows and summing them up, we find that the current bond price is $1,217.92.
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Marcus Xavier noticed that many small rural towns did not have retail sporting goods outlets. To address this need, Marcus created Xavier Sporting Goods. The business experienced the following events during its first year of operation. 1. Acquired $58,000 cash from the issue of common stock 2. On February 1, Year 1. Xavier Sporting Goods purchased merchandise inventory for $33,000 on account from True Sports Incorporated with terms 5/10,n/30 3. On February 8, Year 1. Xavier Sporting Goods settled the payable with True Sports Incorporated Record the recognition of the discount as 3a and the payment of the payable as 3 b.
Answers
The correct answer is The amounts would be based on the payment made to settle the payable.
3a) The recognition of the discount for the payable to True Sports Incorporated would involve reducing the accounts payable and recognizing a reduction in the cost of merchandise inventory. The specific journal entry would depend on the discount terms provided. If the discount is taken, the journal entry would be:
Debit: Accounts Payable - True Sports Incorporated
Debit: Cost of Merchandise Inventory
Credit: Discount on Accounts Payable
The amounts would be based on the terms of the discount and the original payable amount.
3b) The payment of the payable to True Sports Incorporated would involve reducing the accounts payable and cash. The specific journal entry would be:
Debit: Accounts Payable - True Sports Incorporated
Credit: Cash
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Suppose a ten-year, $1,000 bond with an 8.1% coupon rate and semiannual coupons is trading for $1, 034.89.
a. What is the bond's yield to maturity (expressed as an APR with semiannual compounding)?
b. If the bond's yield to maturity changes to 9.8% APR, what will be the bond's price?
Answers
The bond's price has fallen by $150 ($1,034.89 - $854.05 = $180.84)
Given that
Suppose a ten-year, $1,000 bond with an 8.1% coupon rate and semiannual coupons is trading for $1, 034.89
To determine the yield to maturity, we need to use the following formula;
P = C [ (1 - (1 + r/2)^-n) / (r/2)] + FV / (1+r/2)^n
Where;
P = Market price
C = Periodic coupon payment
FV = Face value of bond
n = number of coupon payments
r = periodic interest rate
For this case;
P = 1,034.89
C = $40 (because it pays semiannually)
FV = $1000n
= 10 × 2
= 20
r = ? (we want to determine this)
The first step will be to substitute the above values and solve for
r.1,034.89 = 40 [ (1 - (1 + r/2)^-20) / (r/2)] + 1,000 / (1+r/2)^20
We can solve this using a financial calculator, and we will get r = 3.9547% (rounded off to 3.95%)
Thus, the bond's yield to maturity is 3.95% (7.91% annualized with semiannual compounding)If the bond's yield to maturity changes to 9.8% APR, we can use the same formula;
P = C [ (1 - (1 + r/2)^-n) / (r/2)] + FV / (1+r/2)^n
Where;
P = Market price
C = Periodic coupon payment
FV = Face value of bond
n = number of coupon payments
r = periodic interest rate
For this case;
P = ?
C = $40
FV = $1000n
= 10 × 2
= 20
r = 9.8%/2
= 4.9%
We can solve this using a financial calculator, and we will get
P = $854.05.
Thus, the bond's price will be $854.05.
The bond's price has fallen by $150 ($1,034.89 - $854.05 = $180.84).
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Say that you want to establish a scholarship fund that will make fixed payments forever. To fund the scholarship, you plan to make 12 annual contributions of $3.4k to an investment account with an expected return of 6.0% interest annually. Your first contribution occurs next year. If the scholarship fund makes its first payment the year following the last contribution, then what is the fixed annual payment that the scholarship fund will award? (Round to the nearest dollar)
Answers
The fixed annual payment that the scholarship fund will award is approximately $56,666.67.
To calculate the fixed annual payment that the scholarship fund will award, we can use the perpetuity formula.
The perpetuity formula is:
Fixed annual payment = Annual contribution / Interest rate
In this case, the annual contribution is $3.4k (which is $3,400) and the interest rate is 6.0% expressed as a decimal (0.06).
Fixed annual payment = $3,400 / 0.06
Fixed annual payment ≈ $56,666.67
Therefore, the fixed annual payment that the scholarship fund will award is approximately $56,666.67.
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Crane Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are estimated to total $330,750 for the year, and machine usage is estimated at 157,500 hours. For the year, $405,720 of overhead costs are incurred, and 163,800 hours are used. Compute the manufacturing overhead rate for the year. (Round answer to 2 decimal places, e.g. 1.25.) Manufacturing overhead rate $ per machine hour What is the amount of under-or overapplied overhead at December 31 ? Manufacturing Overhead $ Prepare the adjusting entry to assign the under-or overapplied overhead for the year to cost of goods sold. (List all before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Answers
To compute the manufacturing overhead rate for the year, we divide the estimated overhead costs by the estimated machine hours:
Manufacturing overhead rate = Estimated overhead costs / Estimated machine hours
Manufacturing overhead rate = $330,750 / 157,500 hours
Manufacturing overhead rate = $2.10 per machine hour
The manufacturing overhead rate for the year is $2.10 per machine hour.
To calculate the amount of under- or overapplied overhead at December 31, we compare the actual overhead costs incurred to the overhead applied based on the machine hours used:
Overapplied or underapplied overhead = Actual overhead costs incurred - Overhead applied
Overapplied or underapplied overhead = $405,720 - ($2.10 per machine hour x 163,800 hours)
Overapplied or underapplied overhead = $405,720 - $343,380
Overapplied or underapplied overhead = $62,340 overapplied
The amount of overapplied overhead at December 31 is $62,340.
To assign the overapplied overhead to the cost of goods sold, we would make the following adjusting entry:
Cost of Goods Sold $62,340
Manufacturing Overhead $62,340
This entry reduces the overapplied overhead and increases the cost of goods sold by the same amount, ensuring that the overapplied amount is properly allocated to the appropriate expense account.
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Suppose the spot rate of Polish Zloty to the US dollar is 3.6 and the forward rate in the 180 day market of the Polish Zloty is 3.1 per dollar. The Polish Zloty is then selling at a _____________ to the spot rate.
Express your answer as a decimal not a percentage.
Answers
When the spot rate of Polish Zloty to the US dollar is 3.6 and the forward rate in the 180 day market of the Polish Zloty is 3.1 per dollar. The Polish Zloty is then selling at a discount to the spot rate.
The spot rate refers to the current exchange rate for immediate delivery of a currency. In this case, the spot rate of Polish Zloty to the US dollar is 3.6, which means that 1 US dollar is equal to 3.6 Polish Zloty.
On the other hand, the forward rate is the exchange rate agreed upon now for a future delivery date. In this scenario, the forward rate in the 180-day market for the Polish Zloty is 3.1 per dollar. This implies that in 180 days, 1 US dollar will be exchanged for only 3.1 Polish Zloty.
Since the forward rate is lower than the spot rate, it indicates that the Polish Zloty is selling at a discount to the spot rate. In other words, the market expects the value of the Polish Zloty to depreciate against the US dollar over the 180-day period.
The discount in the forward rate suggests that there is a higher demand for US dollars compared to Polish Zloty in the forward market. This could be due to various factors such as higher interest rates in the US, economic uncertainties in Poland, or expectations of future dollar appreciation. As a result, investors are willing to pay less in the forward market for the Polish Zloty, indicating a discounted rate compared to the spot rate.
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Which of the following is NOT a purpose for which exercises are useful?
Evaluate an operational team’s tactical timing when presented with a specific set of circ*mstances
Assess a planning cell’s capabilities related to a specific type of event. (Incorrect. This IS a useful purpose for an exercise
Identify personnel needs for reassignment or to determine which personnel are the root causes of issues.
Determination of the understanding of a new or revised plan
Answers
The purpose for which exercises are NOT useful is to identify personnel needs for reassignment or to determine which personnel are the root causes of issues.
Exercises are valuable tools for evaluating an operational team's tactical timing, assessing a planning cell's capabilities, and determining the understanding of a new or revised plan. However, they are not specifically designed to identify personnel needs or root causes of issues. Exercises typically focus on testing and refining operational processes, communication channels, decision-making abilities, and overall preparedness.
While they may indirectly reveal gaps or weaknesses in personnel performance, their primary purpose is to simulate real-world scenarios and enhance the team's collective response capabilities. Identifying personnel needs or root causes of issues typically involves other methods such as performance evaluations, feedback sessions, and investigative processes.
Therefore, exercises are not a suitable means for directly addressing those specific purposes.
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1. For each of the following items, indicate whether the costs should be capitalized or expensed immediately. 1. Purchased a patent for $16,000. 2. Paid $7,500 to overhaul a drilling rig. The overhaul will extend the useful life by 3 years. 3. Paid $800 for routine maintenance and lubrication of a tractor. 4. Paid $9,500 to install new equipment in the production line that will "super-cool" the product and allow for faster shipping of fresher merchandise.
Answers
The 9,500 should be capitalized since it is a long-term asset that will result in increased future economic benefits by allowing for faster shipping of fresher merchandise, thus improving sales.
In accounting, there are rules on how to treat expenditures. For each of the following items, indicate whether the costs should be capitalized or expensed immediately:
1. Purchased a patent for 16,000.
A patent is an exclusive right granted to its owner by the government for a certain period.
Capitalize because it is a long-term asset.
2. Paid 7,500 to overhaul a drilling rig. The overhaul will extend the useful life by 3 years.
The 7,500 should be capitalized since the useful life of the drilling rig has been extended by 3 years as a result of the overhaul.
3. Paid 800 for routine maintenance and lubrication of a tractor. The 800 should be expensed immediately because it is a normal recurring cost for the tractor to operate.
4. Paid 9,500 to install new equipment in the production line that will "super-cool" the product and allow for faster shipping of fresher merchandise.
The 9,500 should be capitalized since it is a long-term asset that will result in increased future economic benefits by allowing for faster shipping of fresher merchandise, thus improving sales.
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Hello Chegg Experts!
I am in need of your help regarding the problem below.
Please help by giving me sufficient solution w/ the answer (Box the Final Answer)
Will uprate vote your answer as compensation for answering :)
Please answer once you've seen it. (It has a duration!)
Question:
A man owes ₱120,000 today and agrees to discharge the debt by equal payments at the beginning of each 3 months for 8 years, where these payments included all interest at 8% payable quarterly. Find the quarterly payment. (Draw the cash flow diagram)
Answers
Hello! To answer your question, we can begin by drawing the cash flow diagram for the problem given. We can also use the present worth factor formula to determine the quarterly payment.Let Q be the quarterly payment to be made, which includes all interest at 8% payable quarterly and a total of 8*4 = 32 payments will be made over 8 years.
Using the present worth factor formula, we get:120,000 = Q[(1-(1+i)^-n)/i]where i is the interest rate per quarter and n is the number of payments to be made. Substituting, we get:120,000 = Q[(1-(1+0.08/4)^-32)/(0.08/4)]Simplifying the right-hand side, we get:120,000 = Q[(1-0.3746)/0.02]120,000 = Q[31.2683]Q = 120,000/31.2683Q = 3,839.21Therefore, the quarterly payment that the man must make to discharge the debt is ₱3,839.21.
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Which of the following taxpayers may have an adjustment on their Schedule CA (540), Part I, Section C, in Tax Year 2021?
a) Adam received social security benefits.
b) Connie had California Lottery winnings of $500 and losses of $300.
c) Lola received alimony in 2021. Her marriage settlement agreement was signed on February 1, 2020.
d) Marta was classified as an independent contractor for federal purposes and as an employee for California purposes.
Answers
The taxpayer who may have an adjustment on their Schedule CA (540), Part I, Section C, in Tax Year 2021 is Marta.
Explanation: Marta was classified as an independent contractor for federal purposes and as an employee for California purposes. This difference in classification between federal and California tax purposes may result in an adjustment on Schedule CA (540), Part I, Section C, as California may have different rules or treatment for independent contractors and employees compared to the federal tax regulations. Therefore, Marta's situation may require an adjustment on the California tax return.
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What is the average collection period of the year for the company ERT show work
sales - $2,600 (30% cash, 70% credit), Inventory $700 , Depreciation $1,200, Plant and equipment is $3000 accounts receivable is $245 notes payable is $155
Answers
The average accounts receivable is $245.
To calculate the average collection period for the company ERT, we need to determine the time it takes for the company to collect its accounts receivable. Given the information provided, including sales, inventory, depreciation, plant and equipment, accounts receivable, and notes payable, we can calculate the average collection period.
The average collection period indicates the average number of days it takes for the company to collect payment from its credit customers.
To calculate the average collection period, we need to divide the average accounts receivable by the average daily credit sales. Firstly, we calculate the average accounts receivable by taking the average of the beginning and ending accounts receivable balances.
Then, we calculate the average daily credit sales by dividing the credit sales by the number of days in a year. Finally, we divide the average accounts receivable by the average daily credit sales to obtain the average collection period in days.
Given the information provided, we have sales of $2,600, with 30% cash sales and 70% credit sales.
Therefore, credit sales amount to $2,600 * 0.70 = $1,820. We also have accounts receivable of $245.
To calculate the average accounts receivable, we can consider the beginning and ending accounts receivable balances.
However, since only the ending accounts receivable balance is given, we assume it represents the average accounts receivable.
Hence, the average accounts receivable is $245.
To calculate the average daily credit sales, we divide the annual credit sales by the number of days in a year. Assuming a standard 365-day year, the average daily credit sales would be $1,820 / 365 = $5.
Finally, to calculate the average collection period, we divide the average accounts receivable by the average daily credit sales: $245 / $5 = 49 days.
Therefore, the average collection period for the company ERT is approximately 49 days. This means it takes the company, on average, 49 days to collect payment from its credit customers.
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