Answer
The answer and procedures of the exercise are attached in the following archives.
Explanation
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
The diluted earnings per share for Garfun, Inc. considering the income and preferred dividends, the income from Simon, Inc. given the tax rate, and the potentially diluted convertible bonds from Simon, Inc., it comes out to be $6.58.
Calculating diluted earnings per share (EPS) involves accounting for any securities or methods that could potentially dilute the EPS, such cy as convertible bonds. In this scenario for Garfun, Inc., first, we need to address Garfun's net income (exclusive of investment income). This is given as $480,000. However, they pay preferred dividends of $15,000, which are subtracted from net income when calculating EPS, so we’ll use $465,000 as the income available to common stockholders.
Moving on to Simon, Inc., as Garfun owns all of the stock of Simon, the earnings of Simon will fully contribute to the diluted earnings of Garfun. Taking the reported net income of Simon ($290,000) and adjusting for the 30% tax rate, we get $203,000.
Furthermore, the potentially dilutive securities are the convertible bonds from Simon, Inc. These bonds can be converted into 30,000 shares of common stock ($100 bonds * 3). The interest paid for these convertible bonds, $80,000, is added back to the net income after being adjusted for the tax rate of 30% which is $56,000.
The total of earnings available for common stockholders for the diluted EPS calculation is, therefore $724,000 ($465,000 of Garfun’s net income + $203,000 of Simon’s net income + $56,000 interest on Simon’s bonds adjusted for tax). We also need to account for all the common stocks where earnings will be distributed. This amounts to 110,000 shares (80,000 of Garfun’s shares + 30,000 shares of Simon’s bonds). Hence, the diluted EPS is $6.58 ($724,000 / 110,000).
#SPJ2
A. Purchased $100 of supplies for cash. –$100 $0
B. Recorded an adjusting entry to record
use of $30 of the above supplies.
C. Made sales of $1,250, all on account. 1297 1164
D. Received $850 from customers in payment
of their accounts. 865 299
E. Purchased equipment for cash, $2,600. 2528 2229
F. Recorded depreciation of building for period
used, $650. 610 2839
Answer:
Item cash Net income
a Purchase of Supplies of cash -$100 -
b Adjusting entry for use of supplies - -$30
c Made sales on account - $1,250
Or
Made sales on account - $1,297
d Received cash from customer on acct $850 -
Or
Received cash from customer on acct $865 -
e Purchased equipment for cash -$2,600 -
Or
Purchased equipment for cash -$2,528 -
f Depreciation of building to be recorded - -$650
Or
Depreciation of building to be recorded - -$610
Answer:
$388,017.16
Explanation:
The amount that shall be accumulated at the beginning of retirement to provide a $2,500 for the period of 25 years shall be determined through the present value of annuity formula which is mentioned below:
Amount that should be accumulated=R[(1-(1+i)^-n)/i]
In the given question
R=monthly check that will be received=$2,500
n=number of months during which monthly checks will be received=25*12=300
i=interest rate compounded monthly=6/12=0.50%
Amount that should be accumulated=2500[(1-(1+0.50%)^-300)/0.50%]
=$388,017.16
Answer:
Instructions are lsited below
Explanation:
We don't have enough information to resolve with numbers. But I will leave the formulas necessary to resolve.
The general structure of an income statement proceeds as follow:
Revenue/Sales (+)
Cost of Goods Sold (COGS) (-)
=Gross Profit
Marketing, Advertising, and Promotion Expenses (-)
General and Administrative (G&A) Expenses (-)
=EBITDA
Depreciation & Amortization Expense (-)
=Operating Income or EBIT
Interest (-)
Other Expenses (-)
=EBT (Pre-Tax Income)
Income Taxes (-)
=Net Income
A Contribution Margin Income Statement is a special format of the income statement that segregates the variable and fixed expenses involved in running a business. It shows the revenue generated after deducting all variable and fixed expenses separately.
Sales=
Variable costs:
Cost of good sold=
Sales commissions=
Shipping expense=
Total variable cost=
Contribution margin=
Fixed costs:
Advertising expense=
Shipping expense=
Administrative salaries=
Insurance expense=
Depreciation expense=
Total fixed cost=
Net profit=
Answer:
Year 1 Annual Worth of Defender -$95,700
Explanation:
Calculation to determine when the defending equipment should be retired
Year 1 Total Annual worth=-$37,000(AP 10%,1)-$85,000+($30,000 (AP 10%,1)
Year 1 Total Annual worth=-$37,000(1.10)-$85,000+$30,000(1.000)
Year 1 Total Annual worth= -$95,700
Therefore Total Annual worth of currently owned equipment for year 1 is -$95,700
Year 2 Total Annual worth=-$37,000(AP 10%,2)-$85,000+($30,000 (AP 10%,2)
Year 2 Total Annual worth=-$37,000(0.57619)-$85,000+$19,000(0.47619)
Year 2 Total Annual worth=-$97,217
Therefore the Total Annual worth of currently owned equipment for year 2 is $-97,271
Therefore Based on the above calculation the
the economic service life of equipment will be year 1 reason been that Year 1 Total annual worth of costs of the amount of -$95,700 is lesser in a situation where the equipment is been retained for 1 year.
Answer:
The basis for classifying assets as current or non-current is conversion to cash within
B. the operating cycle or one year, whichever is longer.
Explanation:
Assets are of two types, current assets, and non-current assets. Current assets are the assets which are placed on the list of the balance sheet of the company. Within one fiscal year, the current assets are expected to be converted into cash. On the other hand, non-current assets are the assets are long term asset of the company. They cannot be converted into cash in one fiscal year.
Materials handling $72,000 Number of moves 3,000
Engineering 165,000 Number of change orders 10,000
Other overhead 280,000 Direct labor hours 50,000
Heitger worked on four jobs in July. Data are as follows:
Job 13-43 Job 13-44 Job 13-45 Job 13-46
Beginning balance $20,300 $19,800 $2,300 $0
Direct materials $6,500 $8,900 $12,700 $9,800
Direct labor cost $18,000 $20,000 $32,000 $2,400
Number of moves 44 52 29 5
Number of change orders 30 40 20 20
Direct labor hours 900 1,000 1,600 120
By July 31, Jobs 13-43 and 13-44 were completed and sold. Jobs 13-45 and 13-46 were still in process.
Required:
1. Calculate the activity rates for each of the three overhead activities.
2. Prepare job-order cost sheets for each job showing all costs through July 31.
3. Calculate the balance in Work in Process on July 31.
4. Calculate the cost of goods sold for July.
5. What if Job 13-46 required no engineering change orders? What is the new cost of Job 13-46? How would the cost of other jobs be affected?
Answer:
Kindly check attached picture
Explanation:
1. Calculate the activity rates for each of the three overhead activities.
2. Prepare job-order cost sheets for each job showing all costs through July 31.
3. Calculate the balance in Work in Process on July 31.
4. Calculate the cost of goods sold for July.
5. What if Job 13-46 required no engineering change orders? What is the new cost of Job 13-46? How would the cost of other jobs be affected?
Kindly check attached picture for detailed explanation
This solution calculates the activity rates for three overhead activities, creates job-order cost sheets for four jobs, computes the Work in Process balance and Cost of Goods sold for July, and analysis the impact on job costs if there were no engineering changes for one job.
Firstly, to calculate the activity rates for each of the overhead activities, you need to divide the activity cost driver by the number amount of driver. For Materials handling, this gives us 72,000 / 3,000 = $24 per move; for Engineering, we get 165,000 / 10,000 = $16.5 per change order; and for Other overhead, the calculation gives 280,000 / 50,000 = $5.6 per direct labor hour.
For the job-order cost sheets, you add up all the costs - direct materials, direct labor, and overhead costs. The overhead costs are calculated based on the activity rates we calculated earlier multiplied by the number of drivers. The total for each category is then summed to provide the total cost for each job.
The balance in Work in Process on July 31st is calculated by adding the costs for all uncompleted jobs - which from the data supplied is jobs 13-45 and 13-46.
Cost of Goods Sold (COGS) for July includes costs of all jobs sold in July. As per the supplied data, jobs 13-43 and 13-44 were completed and sold in July. Hence, the costs of these two jobs are added to get COGS.
Lastly, if Job 13-46 required no engineering change orders, the engineering costs for that job would be eliminated, leading to a reduction in the total cost of that job. This would have no effect on the cost of other jobs as costs are allocated based on activity, not spread evenly across all jobs.
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