BUSINESS COLLEGE

Alpha Company has budgeted activity for October to reflect net income $120,000. All sales are credit sales. Receivables are planned to increase by $35,000, payables to decrease by $25,000 and Depreciation Expense is $55,000. Use this information to determine how much cash will increase (decrease) during the month of October. (Round & enter final answers to: the nearest whole dollar for total dollar answers, nearest penny for unit costs or nearest whole number for units)

Answers

Answer 1
Answer:

Answer:

The cash is increased by $115,000 during the month of October.

Explanation:

The computation of net effect of cash is shown below:

= Net income - increased in receivables - decrease in payable + depreciation expense

= $120,000 - $35,000 - $25,000 + $55,000

= $115,000

The increase in receivable should be deducted as the outflow of cash is there, which decrease the cash balance so we deduct it

The decrease in account payable reflect that the company has paid the amount which ultimately reduce the cash balance, hence it is deducted in the computation part

Depreciation expense is added in the cash balance because it is a non cash expense.

Thus, the amount is in positive number which reflects increase in cash

Hence, the cash is increased by $115,000 during the month of October.

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Compute the missing amounts. ​(Enter the contribution margin ratio to nearest​ percent, X%.)A B C
Sales price per unit $200 $4,000 $5,220
Variable costs per unit 80 1,000 2,088
Total fixed costs 73,200 660,000 3,758,400
Target profit 266,760 3,000,000 3,132,000
Calculate:
Contribution margin per unit
Contribution margin ratio
Required units to break even
Required sales dollars to break even
Required units to achieve target profit

Answers

Answer:

Contribution margin per unit

A =  $120

B =    $3,000

C =  $3,132

Contribution margin ratio

A = 60%

B =   75%

C = 60%

Units to break even

A =  610 units

B =    220 units

C = 1,200 units

Sales dollars to break even

A = $122,000

B =   $880,000

C = $6,264,000

Units to achieve target profit

A = 2,833 units

B = 1220 units

C = 2,200 units

Explanation:

Contribution margin per unit

Contribution margin = Sales - Variable Costs

                                               A              B                 C

Sales price per unit           $200      $4,000        $5,220

Variable costs per unit      ($80)     ($1,000)      ($2,088)

Contribution Margin          $120      $3,000         $3,132

Contribution margin ratio

Contribution margin ratio = Contribution / Sales × 100

A = $120 / $200 × 100

   = 60%

B =   $3,000  / $4,000 × 100

   = 75%

C = $3,132 / $5,220 × 100

   = 60%

Units to break even

Units to break even = Fixed Cost ÷ Contribution margin per unit

A = $73,200 ÷  $120

   = 610 units

B =   $660,000  ÷   $3,000

   = 220 units

C = $3,758,400 ÷   $3,132

   = 1,200 units

Sales dollars to break even

Units to break even = Fixed Cost ÷ Contribution margin ratio

A = $73,200 ÷  60%

   = $122,000

B =   $660,000  ÷   75%

   = $880,000

C = $3,758,400 ÷   60%

   = $6,264,000

Units to achieve target profit

Units to achieve target profit = Fixed Cost + Target Profit ÷ Contribution margin per unit

A = $73,200 + 266,760 ÷  $120

   = 2,833 units

B =   $660,000 + 3,000,000  ÷   $3,000

   = 1220 units

C = $3,758,400 + 3,132,000 ÷   $3,132

   = 2,200 units

Ethelbert is a young software company owned by two entrepreneurs. It currently needs to raise $1,254,400 to support its expansion plans. A venture capitalist is prepared to provide the cash in return for a 40% holding in the company. Under the plans for the investment, the VC will hold 19,600 shares in the company and the two entrepreneurs will have combined holdings of 29,400 shares.a. What is the total after-the-money valuation of the firm?
b. What value is the venture capitalist placing on each share?

Answers

Answer:

a. $3,136,000

b. $64 per share

Explanation:

The computation is shown below

a. The total after the money valuation is

= $1,254,400 ÷ 40%

= $3,136,000

b. The value that venture capitalist place on each share is

= $3,136,000 ÷ (19,600 ÷ 40%)

= $3,136,000 ÷ 49,000 shares

= $64 per share

Hence, the same should be considered

Faeber Textile Company frequently factors its accounts receivable. During 2019, Faeber made credit sales of $100,000 to customers, under terms of 2/10, n/30. Faeber records its credit sales using gross price. In 2019, Faeber sold $70,000 of these receivables to a factor. The factor remitted 90% of the accounts receivable factored and charged a 12% commission on the gross amount of the factored receivables. The factoring agreement also requires Faeber to be responsible for any cash discounts taken by customers upon payment of the factored receivables. Faeber is charged for these cash discounts upon reimbursement by the factor. During 2019, the factor collected the remaining amount of the factored receivables, minus the 2% discount on 94% of the collected receivables, and returned the balance owed to Faeber. Faeber collected the remaining amount of the unfactored accounts receivable, minus the 2% discount on 96% of the collected receivables. Required: Prepare all the journal entries necessary for Faeber to record the preceding information.

Answers

Answer:

Faeber Textile Company frequently factors its accounts receivable. During 2019, Faeber made credit sales of $100,000 to customers, under terms of 2/10, n/30. Faeber records its credit sales using gross price.

Dr Accounts receivable 100,000

    Cr Sales revenue 100,000

In 2019, Faeber sold $70,000 of these receivables to a factor. The factor remitted 90% of the accounts receivable factored and charged a 12% commission on the gross amount of the factored receivables.

Dr Cash 54,600

Dr Factoring expense 8,400 (= $70,000 x 12%)

Dr Factoring receivables 7,000

    Cr Accounts receivable 70,000

The factoring agreement also requires Faeber to be responsible for any cash discounts taken by customers upon payment of the factored receivables. Faeber is charged for these cash discounts upon reimbursement by the factor. During 2019, the factor collected the remaining amount of the factored receivables, minus the 2% discount on 94% of the collected receivables, and returned the balance owed to Faeber.

Dr Cash 5,684 (=$7,000 - $1,316)

Dr Sales discounts 1,316 (= $70,000 x 94% x 2%)

    Cr Factoring receivables 7,000

Faeber collected the remaining amount of the unfactored accounts receivable, minus the 2% discount on 96% of the collected receivables.

Dr Cash 29,424 (= $30,000 - $576)

Dr Sales discounts 576 (= $30,000 x 96% x 2%)

    Cr Accounts receivable 30,000

4% of the accounts receivable were collected at 100%, and 96% were collected at 98%.

A company purchased a building for $850,000 on January 1, 2010. As of December 31, 2014, $200,000 of accumulated depreciation had been recorded related to this building. The building was sold to another party for $1,250,000 on January 1, 2015. On the sale of this building, the company should recognize:

Answers

Answer: Gain of $600,000

Explanation: As we know that :-

Gain / loss = Sales value - Cost of building

Now, we can compute cost of building on date of sale as follows :-

cost = purchase date cost - accumulated depreciation

        = $850,000 - $ 200,000

        = $650,000

putting the values into initial equation we get :-

Gain = $1,250,000 - $650,000

        = $600,000

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17.5% and 18.8%
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None of the above options is correct.

Answers

Add all together and total number you will get substract it from your main answers

Wight Corporation has provided its contribution format income statement for June. The company produces and sells a single product. Sales (4,500 units) $ 180,000 Variable expenses 81,000 Contribution margin 99,000 Fixed expenses 45,000 Net operating income $ 54,000 If the company sells 4,600 units, its total contribution margin should be closest to: (Do not round intermediate calculations.)

Answers

Answer:

$101,200

Explanation:

First, we need to calculate the total contribution margin per unit

Contribution margin per unit = 99,000 ÷ 4,500

Contribution margin = $22 per unit

Then, we will multiply with the units sold to get the budgeted contribution margin

= Units sold × Contribution margin per unit

= 4,600 × $22

= $101,200

Therefore, its total contribution margin should be closest to $101,200
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