Stevenson Company purchased equipment for $250,000 on January 1, 2010. The estimated salvage value is $50,000, and the estimated useful life is 5 years. The straight-line method is used for depreciation. On July 1, 2013 Stevenson sold the equipment for $100,000. The journal entry to record the sale of the equipment will include.
Answers
Answer: The following journal entries would be recorded upon disposal of the equipment:
Debit Credit
Cash $100,000
Accumulated depreciation $140,000
Equipment $250,000
Loss on disposal of asset $10,000
Explanation: Using the straight-line method of depreciation, the following formula applies: (Historical cost - Salvage value) / No of years
Depreciation = ($250,000 - $50,000) / 5 years = $40,000 yearly
Accumulated depreciation (January 1, 2010 - July 1, 2013) for three and half years is $140,000 (3.5 years * $40,000). This means that the equipment had a net book value (NBV) of $110,000 as at the time of disposal. So, the above entries would eliminate the asset in the books and recognise the loss on disposal (sales proceed was less than the NBV).
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Assuming a tax rate of 30%, the after-tax cost of a $100,000 dividend payment is a. $70,000 b. $100,000 c. $30,000 d. None of the options
Harvey Automobiles uses a standard part in the manufacture of several of its trucks. The cost of producing 60,000 parts is $160,000, which includes fixed costs of $50,000 and variable costs of $110,000. The company can buy the part from an outside supplier for $3.00 per unit, and avoid 30% of the fixed costs. If Harvey Automobiles makes the part, how much will its operating income be?
b. CPS scheduling
c. Breakeven analysis
d. ABC analysis
Answers
Answer: (D) ABC analysis
Explanation:
ABC analysis is one of the type of inventory method that are basically divided into the three main categories that is A,B and the C categorization.
The main advantage of this type of analysis is that it is categorized on the quantity and the values basis and this analysis is basically keeps the cost in the business under the control. It is also known as the inventory management and the ABC analysis contributed in the overall profit in an organization.
According to the question, the retail manager basically using the ABC analysis for determining the inventory items in the system.
Therefore, Option (D) is correct.
Answers
Answer:
The answer is "$4.311".
Explanation:
Calculating the EPS after the merger:
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Using the accrual method, the unearned revenue as of December 31 is $12,000.
What is Unearned revenue?
Unearned revenue can be defined as the amount a company received from their client for the service they are yet to rendered.
Since the company has received full balance for the services not yet provided. The unearned revenue as of December 31 will be $12,000 .
Reason been that the amount that the client paid the company is for a year-long contract, hence the $12,000 represent a prepayment amount for the service the company is yet to rendered to their client
Inconclusion using the accrual method, the unearned revenue as of December 31 is $12,000.
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The $12,000 payment is for a one-year contract, however, we will only record revenue from October 1 up to December 31 which are the months that already lapsed. The remaining nine months are still considered unearned revenue. Thus, the remaining unearned revenue is $9,000.
Unearned revenue is the amount received from a client for a service that has yet to be rendered. Since the company has received the full balance over the services not yet provided. As of December 31, the unearned revenue will be $12,000.
Because the client paid the company for a year-long contract, the $12,000 represents a prepayment for the service the company has yet to render to their client. Using the accrual method, the revenue that is not earned as of December 31 is $9000.
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Answers
Answer:
Correct answer is 12.11%
Explanation:
expected dividend =$3.2*60%
=$1.92
Hence cost of equity from new common stock=(D1/Current price(1-Floatation cost)+Growth rate
=1.92/(30(1-0.1))+0.05
=(1.92/27)+0.05
which is equal to
=12.11%(Approx).
Answer: 12.11%
Explanation:
GIVEN THE FOLLOWING ;
Earning per Share = $3.20
Expected dividend pay out ratio.(proportion of earning paid out as interest.)
Cost of stock per share = $30
Dividend growth rate = 5%= 0.05
Floatation cost = 10% = 0.1
Cost of equity=(dividend/(Current price(1-Floatation cost)) +Growth rate
Cost of Equity =[ (1. 92÷(30(1 - 0.1)) + 0.05
Cost of equity = [ (1.92 ÷ (30(0.9)) + 0.05
Cost of equity = (1.92 ÷ 27) + 0.05
Cost of equity = 0.07111111 + 0.05 = 0.121111
0.12111 × 100 = 12.11%
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Answer:
The expected return for securities with maturities of two, three, and four years is as follows:
Expected Return 2 year Security=4.50 %
Expected Return 3 year security=6 %
Expected Return 4 year security=7.25 %
Explanation:
According to the expectations hypothesis theory, the expected return for the 2 year security is the average of the expected yields of two one-year T-bills, for the 3 year security is the average of the expected yields of three one-year T-bills and the 4 year security is the average of the expected yields of the four one-year T-bills.
Therefore, in order to calcuate the expected return for each year we have to use the following formula:
Expected Return 2 year Security=(4 + 5) / 2 = 4.50 %
Expected Return 3 year security=(4 + 5 + 9) / 3 = 6 %
Expected Return 4 year security=(4 + 5 +9 + 11) / 4 = 7.25 %
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Answer:
The correct answers are letters "A", "B", and "C": Explaining the resolution to the problem; Preventing a recurrence of the problem; Communicating compliance.
Explanation:
Adjustment letters are communications with legal nature from companies to customers who filed a claim. The main purpose of the letter is to politely inform the client that the claim was received, what steps were taken to analyze the situation, what is the final resolution after the study and what will be done as a result. The ultimate goal of the adjustment letter is to keep a good relationship with the customer so they can continue doing business.
Final answer:
An adjustment letter should focus on explaining the resolution to the problem, preventing a recurrence of the issue, communicating compliance, and issuing an apology to the customer.
Explanation:
An adjustment letter should focus on several key elements to ensure effective communication and customer satisfaction. These include:
- Explaining the resolution to the problem: The letter should clearly state what actions have been or will be taken to solve the issue. This is to reassure the customer that their issue is being handled properly.
- Preventing a recurrence of the problem: The letter should detail the steps that are taken by the business in order not to let the issue occur again in the future, thereby showing concern for customer experience.
- Communicating compliance: This involves ensuring that all the procedures, policies and regulatory requirements have been complied with, by apprising the customer about the same in detail.
- Apologizing: An important part of an adjustment letter is an apology to the customer for the inconvenience they've experienced. The apology should sound sincere and indicate that the business values the customer.
The focus of the letter should never be blaming the customer. Rather, it should be centered around finding a resolution and preventing the recurrence of the problem.
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