BUSINESS COLLEGE

The cost of an asset is $ 1 comma 050 comma 000​, and its residual value is $ 130 comma 000. Estimated useful life of the asset is ten years. Calculate depreciation for the second year using the doubleminusdecliningminusbalance method of depreciation.​ (Do not round any intermediate​ calculations, and round your final answer to the nearest​ dollar.)

Answers

Answer 1
Answer:

Answer:

$168,000

Explanation:

Depreciation expense using the double declining method = Depreciation factor x cost of the asset

Depreciation factor = 2 x (1/useful life)

Depreciation factor = 2 x (1/10) = 0.2

depreciation expense in year 1 = 0.2 x $1,050,000 =$210,000

book value at the beginning of year 2 = $1,050,000 - $210,000 = $840,000

depreciation expense in year 2 = 0.2 x $840,000 = $168,000

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Baker's product manager continues to perform well in the market. However, a competing product is coming on strong and is looking to take over as the market share leader in the segment. Without sacrificing contribution margin, what can the Baker product manager do in order to improve upon the buying criteria, and thus potentially increase demand

Answers

Question options :

Increase MTBF by 2000

Reposition Cake to make it even smaller and higher performing

Increase the promotion budget to gain greater awareness

Lower the selling price since it is the second most important buying criteria

Answer:

Increase the promotion budget to gain greater awareness

Explanation:

In this case, some managers might consider reducing price and may be affecting contribution margin in this way(because selling price/profit is reduced and price- variable cost =contribution margin). While price reduction might be a good strategy to compete in the market, it might not be the best option here. in order to increase demand in a case such as this, the manager should consider increasing product awareness so as to reach more potential buyers and increase market share compared to competitors.

On January 1, 2021, Tropical Paradise borrows $46,000 by agreeing to a 6%, five-year note with the bank. The funds will be used to purchase a new BMW convertible for use in promoting resort properties to potential customers. Loan payments of $889.31 are due at the end of each month with the first installment due on January 31, 2021. Required:
Record the issuance of the installment note payable and the first two monthly payments.

Answers

Issuance: Installment Note Payable $46,000; First two payments: Interest Expense $230.00, Installment Note Payable $659.31 each month.

On January 1, 2021, Tropical Paradise records the issuance of a 6%, five-year installment note payable with a principal amount of $46,000. This note is obtained from the bank to finance the purchase of a BMW convertible for promotional purposes related to resort properties. The terms of the loan stipulate monthly payments of $889.31, with the first installment due on January 31, 2021.

For the first two monthly payments:

1. The Interest Expense is calculated based on the outstanding balance of the loan and the interest rate. In the first month, the interest is $46,000 * 6% / 12 = $230.00.

2. The remaining amount of the monthly payment is applied to reduce the principal, recorded as a repayment of the Installment Note Payable. The principal repayment is $889.31 - $230.00 = $659.31.

This process repeats in the second month, with the interest recalculated based on the remaining balance, and the remaining amount again applied to reduce the principal. These entries reflect the gradual repayment of both interest and principal over the life of the loan.

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Answer:

Journal entry

Explanation:

The Journal entry is shown below:-

1. Cash Dr,                                            $46,000

   To Notes payable                                         $46,000

(Being issuance of notes is recorded)

2. Interest expense Dr,                     $230    

Notes payable Dr,                              $659.31

    To Cash                                                   $889.31

(Being payment of first installment is recorded)

3. Interest expense Dr,                   $226.70

Notes payable Dr,                           $662.61

    To Cash                                                  $889.31

Working note :-

First installment interest expenses

= $46,000 × 6% × 1 month ÷ 12 month

= $230

Second installment interest expenses

= ($46,000 - $659.31) × 6% × 1 month ÷ 12 month

= $45,340.68 × 6% × 1 ÷ 12

= $226.70

Investors expect the market rate of return this year to be 14.50%. The expected rate of return on a stock with a beta of 1.2 is currently 17.40%. If the market return this year turns out to be 12.10%, how would you revise your expectation of the rate of return on the stock?

Answers

Answer:

14.52%

Explanation:

The computation of the rate of return on the stock is shown below:-

The expected rate of return on the stock = Beta × (Rate of return - Market rate of return)

= 1.2 × (0.121 - 0.145)

= - 2.88%

So, the expected rate of return on the stock = Current percentage - expected rate of return on the stock

= 0.174 - 0.0288

= 14.52%

Therefore we simply applied the above formulas

Saturn ​Motorcycle's selected accounts as of December 31​, 2018​, ​follow: Selling Expenses $10,400
Interest Revenue 1,900
Net Sales Revenue 130,000
Cost of Goods Sold 81,000
Administrative Expenses 8,500

Required:
Prepare the​ multi-step income statement for the year ended December 31​, 2018.

Answers

Solution and Explanation:

the following is the income statement for the year ending

                          Saturn motorcycle's

                               Income statement

                          year ending december 31, 2018

Particulars                                                                                    Amount

net sales revenue                                                                        130000

Less: cost of goods sold                                                                81000

gross profit                                                                                  49000

Less: operating expense:

Selling expenses                          10400

adminstartive expenses                 8500                                  

Total operating expenses                                                         18900

operating profit                                                                             30100

Non operating revenues ( expenses)

add: interest revenue                       1900

total other revenue                                                                      1900

net income                                                                                   32000

Note: every amount is in dollars

Final answer:

To prepare the multi-step income statement for Saturn Motorcycle for the year ended December 31, 2018, subtract the cost of goods sold from the net sales revenue to get the gross profit. Then, add the selling expenses and administrative expenses to get the operating expenses. Finally, add the operating income and other income to get the net income.

Explanation:

To prepare the multi-step income statement for Saturn Motorcycle for the year ended December 31, 2018, we need to include key components such as net sales revenue, cost of goods sold, selling expenses, administrative expenses, and interest revenue. Here is the breakdown:

  1. Gross Profit: Subtract the cost of goods sold from the net sales revenue. (130,000 - 81,000 = 49,000)
  2. Operating Expenses: Add selling expenses and administrative expenses. (10,400 + 8,500 = 18,900)
  3. Operating Income: Subtract operating expenses from gross profit. (49,000 - 18,900 = 30,100)
  4. Other Income: Include interest revenue. (1,900)
  5. Net Income: Add operating income and other income. (30,100 + 1,900 = 32,000)

The multi-step income statement for Saturn Motorcycle for the year ended December 31, 2018 is as follows:

Saturn Motorcycle Income Statement

Net Sales Revenue$130,000Cost of Goods Sold$81,000Gross Profit$49,000Operating Expenses$18,900Operating Income$30,100Other Income$1,900Net Income$32,000

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In a perfectly competitive market, the process of entry and exit will end when (i) accounting profits are zero. (ii) economic profits are zero. (iii) price equals minimum marginal cost. (iv) price equals minimum average total cost.

Answers

Answer:

 (ii) economic profits are zero

Explanation:

A perfect competition is characterised by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.

In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.

Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.

I hope my answer helps you

A company has the following per unit original costs and replacement costs for its inventory: Part A: 5 units with a cost of $5, and replacement cost of $4.00 Part B: 10 units with a cost of $6, and replacement cost of $7.00 Part C: 10 units with a cost of $3, and replacement cost of $2.00 Using the lower of cost or market method applied to the individual items, the total value of this company's ending inventory is: (A) $100.00
(B) $125.00
(C) $110.00.
(D) $115.00.

Answers

Answer:

Option (A) is correct.

Explanation:

Part A:

Cost = No. of units × cost per unit

       = 5 × $5

       = $25

Replacement cost = No. of units × cost per unit

                              = 5 × $4

                              = $20

Value to be recognized = $20

Part B:

Cost = No. of units × cost per unit

       = 10 × $6

       = $60

Replacement cost = No. of units × cost per unit

                              = 10 × $7

                              = $70

Value to be recognized = $60

Part C:

Cost = No. of units × cost per unit

       = 10 × $3

       = $30

Replacement cost = No. of units × cost per unit

                              = 10 × $2

                              = $20

Value to be recognized = $20

Therefore,

Value of Ending inventory = Sum of recognized value of all the three parts

                                            = $20 + $60 + $20

                                            = $100

Hence, the total value of this company's ending inventory is $100.
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