A. Contribution margin ratio: Contribution margin = Unit sales price - Variable cost per unit = $30 - $6 = $24
Contribution margin ratio = Contribution margin / Unit sales price = $24/$30 = 0.8
B. To break even, total sales volume (in dollars) must equal total fixed costs:
Break even sales volume (in dollars) = Total fixed costs = $360,000
To earn an operating income of $440,000, the total sales volume (in dollars) must be:
Required sales volume (in dollars) = Total fixed costs + Operating income = $360,000 + $440,000 = $800,000
D. The margin of safety (in dollars) is calculated by subtracting the break-even sales volume (in dollars) from the actual sales volume (in dollars):
Margin of safety (in dollars) = Actual sales volume (in dollars) - Break-even sales volume (in dollars) = $30 x 60,000 units. - $360,000 = $1,800,000 - $360,000 = $1,440,000
E. Operating income is calculated by multiplying the contribution margin ratio with the actual sales volume (in dollars):
Operating income = Contribution margin ratio x Actual sales volume (in dollars) = 0.8 x ($30 x 60,000 units) = $14,400,000 x 0.8 = $11,520,000
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Eddie's Electronics sells laptop computers for $450 cach. At this price, the store sells 325 laptops per month. Eddie's Electronics incurs a cost of $398 for each laptop it sells. Assume that this is the store's only cost. What are Eddie's Electronics' revenue and profit? Feedback You have not stered the correct revenue for Eddie's Electronics. Revenue is equal to price times quantity Revenue: $ 146250 Accounting Profit: $ 234000 Economic Profit Eddie recently received an offer from a big box store to purchase his business at a valuation of $100,000. If invested in the stock market, these funds could earn 0.6% return, on average, per month. Assuming the valuation is accurate and Eddy could earn $4,000 a month if he returned to his previous IT job, what are Eddy's monthly economic profits from running Eddie's Electronics?
Eddie's Electronics' Total revenue TR = $146,250 and Eddie's Electronics' profit is Profit = $16,900
Profit is nothing but/other than Total revenue (TR) - Total cost (TC).
TR is P × Q.
Price is given to be $450. Quantity is given to be 325 units. Cost per unit is $398.
TR= 450 × 325
TR = $146,250
Total cost = Cost per unit × total units sold.
TC = 398 × 325
TC = $129,350
Profit = $146,250 - $129,350
Profit = $16,900
Gross sales is the total revenue earned by a seller from selling goods or services to a buyer. It can be written as P × Q. This is the price of the item multiplied by the quantity of the item sold.
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Complete question:
Eddie's Electronics sells laptop computers for $ 450 each. At this price, the store sells 325 laptops. Eddie's Electronics incurs a $ 398 cost for each laptop it sells. Assume that this is the store's only cost. Round your answers to the nearest dollar. What is Eddie's Electronics' revenue? $ What is Eddie's Electronics' profit?
risk is the risk that a borrower may prepay the mortgage in response to a decline in interest rates. a. reinvestment rate b. credit c. interest rate d. prepayment
The risk that a borrower may prepay the mortgage in response to a decline in interest rates is called prepayment. The correct option is option d.
What is prepayment?A prepayment is a cash payment made before the scheduled due date for a debt service obligation. Prepayments can be made in installments or in a lump sum, and they are frequently made in the form of mortgage payments. They are made by borrowers who want to reduce their outstanding debt sooner than anticipated or who want to decrease the amount of interest they will pay over time.
What is reinvestment rate?The reinvestment rate is the amount of money that an investor can expect to earn on a particular investment in the future. The reinvestment rate is influenced by a variety of factors, including the interest rate on the investment, the type of investment, and the investor's risk tolerance.
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beto company pays $7.30 per unit to buy a part for one of the products it manufactures. with excess capacity, the company is considering making the part. making the part would cost $8.40 per unit for direct materials and $1.00 per unit for direct labor. the company normally applies overhead at the predetermined rate of 200% of direct labor cost. incremental overhead to make the part would be 80% of direct labor cost.
In the following question, To make the part, the Beto Company would need to pay $8.40 per unit for direct materials, $1.00 per unit for direct labour, and 80% of direct labour cost ($0.80) in incremental overhead, totalling $10.20 per unit.
The Beto Company is considering making a part for one of its products, which it currently pays $7.30 per unit to buy. The direct materials cost for the part is $8.40 per unit and the direct labour cost is $1.00 per unit. The company normally applies overhead at a rate of 200% of direct labour cost, which would be an incremental overhead of 80% for the part.
Therefore, to make the part, the Beto Company would need to pay $8.40 per unit for direct materials, $1.00 per unit for direct labour, and 80% of direct labour cost ($0.80) in incremental overhead, totalling $10.20 per unit.
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Art Supply Company had the following account balances for the year ended December 31, 2020. Use this information to prepare a multistep income statement for Art Supply Company. All gray highlighted boxes need to be completed. Hint: It may be helpful to label each account with its location on the income statement before preparing the statement. Advertising expense Cost of goods sold Gain on sale of building Income tax expense Insurance expense Interest expense Revenue Salaries expense Supplies expense Utilities expense 2,100 62,420 29,100 7,170 6,760 5,610 102,450 18,280 1,420 6,270 Art Supply Company Income Statement For the year ended December 31, 2020 Gross profit Operating expenses: Total operating expenses Operating income Other income/expense (nonoperating items): Income before taxes Net income 2. After preparing the income statement, briefly share your thoughts on Art Supply Company's 2020 results. Based on this statement, are they thriving or was it a difficult year?
Art Supply Company had a good year in 2020. Their gross profit of $40,030 and net income of $21,420 indicate that the company was thriving.
Art Supply Company Income Statement
For the year ended December 31, 2020
Revenue $102,450
Cost of goods sold $62,420
Gross profit $40,030
Operating expenses:
Advertising expense $2,100Salaries expense $18,280Supplies expense $1,420Insurance expense $6,760Utilities expense $6,270Interest expense $5,610Total operating expenses $40,540Operating income (loss) $510Other income/expense (nonoperating items):
Gain on sale of building $29,100Income before taxes $28,590Income tax expense $7,170Net income $21,420
Based on this statement, Art Supply Company had a good year in 2020. Their gross profit of $40,030 and net income of $21,420 indicate that the company was thriving. Additionally, the gain on sale of building helped the company to significantly increase their income before taxes.
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Requiring approval of customers' credit history, reviewing the age of past due accounts and rewarding speedy collections are examples of controls over ______.
accounts receivable
Accounts receivable is an important asset of a company, and it is critical to monitor and control it. As a result, accounts receivable management is a critical component of every company's financial management.
A set of controls are needed for accounts receivable management to be successful. These controls include the approval of customers' credit history, reviewing the age of past due accounts, and rewarding speedy collections. These controls are essential for the following reasons: Approving customer's credit history: Before agreeing to extend credit to a customer, it is critical to examine their credit history. If a customer has a poor credit history, extending credit to them may result in losses for the company.Reviewing the age of past due accounts: It is critical to review the age of past due accounts regularly to ensure that the company is not losing money due to unpaid debts. Accounts that are overdue for a prolonged period should be dealt with swiftly.Rewarding speedy collections: Offering incentives to customers who pay their accounts promptly can encourage them to pay their accounts quickly. Early payment benefits can include discounts, free shipping, and other benefits. The sooner accounts receivable are paid, the healthier a company's cash flow will be.Accounts receivable is an important component of a company's financial management. To keep it under control, a set of controls are required. These controls include the approval of customer's credit history, reviewing the age of past due accounts, and rewarding speedy collections.
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Companies sometimes spend millions to move location:
A. for pleasant scenery
B. to be near vacation spots
C. at a supplier's request
D. for proximity to customers
Companies sometimes spend millions to move locations for better proximity to customers.
What is a company? A company is an organization or association of persons for the purpose of conducting business or commercial activities. A corporation's purpose is to make a profit by providing goods and services that people want or need. A company has a legal identity that is distinct from its owners and is, in fact, a separate person for the purposes of the law.
What is a location? The physical location or place where a business, service, or other entity is located is referred to as its location. The place or position where something is or occurs is referred to as a "location." A location is the physical setting in which something exists, such as a company, a building, or a particular site. A location is where you are in a physical sense.
Answer: Companies sometimes spend millions to move locations for proximity to customers.
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A small open economy with a floating exchange rate is initially in equilibrium at A with IS1*, LM1*. Holding all else constant, if the domestic price level increases, then the _____ curve will shift to _____.
A. IS1*; IS2*
B. IS1*; IS3*
C. LM1*; LM2*
D. LM1*; LM3*
This decrease in the demand for goods and services will lead to a decrease in the level of real GDP, thus causing the IS curve to shift to the left from IS1* to IS3*.
A small, open economy is only a small fraction of the world market, so it does not have a significant impact on global interest rates.
When the domestic price level increases, the IS curve will shift to IS3* since an increase in the price level will decrease real money balances, resulting in a decrease in the demand for goods and services. This decrease in the demand for goods and services will lead to a decrease in the level of real GDP, thus causing the IS curve to shift to the left from IS1* to IS3*.
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According to the classical dichotomy, which of the following is not influenced by monetary factors? a. the price level b. real GDP c. nominal interest rates d. All of the above are correct.
In the following question, among the given options, According to the classical dichotomy, Option B). "real GDP" is not influenced by monetary factors.
What is the classical dichotomy? The classical dichotomy is a fundamental principle of classical economics that distinguishes between the real and nominal variables in the economy. The principle asserts that changes in nominal variables, such as the money supply or price level, do not affect real variables like employment, output, and consumption.
Real variables are influenced by non-monetary factors like technology and labour inputs, whereas nominal variables are determined by the money supply and inflation expectations. Real GDP According to the classical dichotomy, real GDP is not influenced by monetary factors.
Real GDP is a macroeconomic measure of the value of goods and services produced by an economy adjusted for inflation. The total value of goods and services produced in an economy is measured by GDP. The GDP deflator, which measures inflation in the economy, is used to calculate real GDP. Since inflation is a nominal variable, it does not affect real GDP. Thus, the correct answer is b. real GDP is not influenced by monetary factors.
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The classical dichotomy states that real variables, like real GDP, are not influenced by monetary factors. Real GDP is a measure of the aggregate output of the economy, and is calculated by accounting for the inflationary environment.
This means that it takes into account changes in the price level, but does not take into account changes in the money supply.
Nominal interest rates, on the other hand, are affected by monetary factors, since they are determined by the amount of money available in the economy, and the demand for it. Therefore, the answer to the question is d. All of the above are correct.
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assume you normally purchase 250 cases of vodka a month at an ap price of $67.50 per case. you could purchase a two-month supply at an ap price of $60.00 per case. if your ordering cost is $50.00 per order and your storage cost is 24 percent per year, approximately how much money would you save if you purchased the two-month supply?
Amount of money you would save if you purchased the two-month supply: $3,699.40.
To calculate how much money you would save:
1. Calculate the total cost for the normal 250 cases of vodka for two months:
250 cases x 2 months x $67.50/case = $33,750
2. Calculate the total cost for the two-month supply of vodka:
250 cases x 2 months x $60.00/case = $30,000
3. Calculate the total difference in cost between the normal purchase and the two-month supply purchase:
$33,750 - $30,000 = $3,750
4. Calculate the total additional cost of the two-month supply purchase:
$50.00 (ordering cost) + (storage cost of 24% per year x 2 months) = $50.00 + (0.24 x 2) = $50.60
5. Calculate the total amount of money you would save if you purchased the two-month supply:
$3,750 - $50.60 = $3,699.40
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suppose workers expect the price level to increase by 5%. the wage setting relationship predicts that (a) the nominal wage will increase by less than 5%. (b) the nominal wage will increase by exactly 5%. (c) the nominal wage will increase by more than 5%. (d) the real wage will increase by 5%. (e) the real wage will increase by less than 5%.
Answer: (a) The nominal wage will increase by less than 5%.
Suppose workers expect the price level to increase by 5%. The wage-setting relationship predicts that the nominal wage will increase by less than 5%. When the workers expect the price level to increase by 5%, the nominal wage will increase by less than 5%. The nominal wage is the amount of money paid to a worker on an hourly, daily, or weekly basis. The real wage is the wage that a worker earns after adjusting for the effects of inflation.
The relationship between the nominal wage and the price level is referred to as the wage-setting relationship. The nominal wage is affected by the price level, and the wage-setting relationship is used to predict the effect of changes in the price level on the nominal wage. In general, the wage-setting relationship predicts that nominal wages will increase by less than the increase in the price level.
This means that the real wage will decrease. The real wage is the nominal wage divided by the price level. This means that if the price level increases by 5%, the nominal wage would need to increase by more than 5% to maintain the same real wage. If the nominal wage only increases by 5%, the real wage will decrease by the same amount as the price level increase, resulting in a decrease in purchasing power for the workers.
Therefore, the wage-setting relationship predicts that the nominal wage will increase by less than 5% when the workers expect the price level to increase by 5%.
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A fundamental assumption behind the Keynesian aggregate expenditure model is that prices in the economy are ______.
Multiple choice question.
unknown
unrelated
fixed
flexible
Assume that you manage a risky portfolio with an expected rate of return of 15% and a standard deviation of 40%. The T-bill rate is 5%.
Your risky portfolio includes the following investments in the given proportions:
Stock A 24 %
Stock B 33 %
Stock C 43 %
Your client decides to invest in your risky portfolio a proportion (y) of his total investment budget with the remainder in a T-bill money market fund so that his overall portfolio will have an expected rate of return of 13%.
a. What is the proportion y? (Round your answer to 2 decimal places.)
Proportion y ____
b. What are your client's investment proportions in your three stocks and the T-bill fund? (Round your intermediate calculations and final answers to 2 decimal places.)
Security Investment Proportions
T-Bills ____%
Stock A ____%
Stock B ____%
Stock C ____%
c. What is the standard deviation of the rate of return on your client's portfolio? (Round your intermediate calculations and final answer to 2 decimal places.)
Standard deviation ____% per year
The proportion y can be calculated using the formula:(15% - 5%) / (13% - 5%) = 1.33. The standard deviation of the rate of return on the client's portfolio is 53.20% per year.
The proportion y is 1.33, which means that the client should invest 133% of his budget in the risky portfolio and borrow the remaining 33% at the risk-free rate of 5% to achieve an expected rate of return of 13%. The investment proportions in the three stocks and the T-bill fund can be calculated as follows:
Stock A: (0.24 x 1.33) / 1.33 = 0.24 or 24%
Stock B: (0.33 x 1.33) / 1.33 = 0.33 or 33%
Stock C: (0.43 x 1.33) / 1.33 = 0.43 or 43%T-bills: 0.33 or 33%The standard deviation of the rate of return on the client's portfolio can be calculated using the formula:
σp = √[(yσr)² + ((1-y)σf)² + 2y(1-y)Cov(r,f)]
where σr = 40% (the standard deviation of the risky portfolio), σf = 0% (the standard deviation of the risk-free asset) Cov(r,f) = 0% (the covariance between the risky portfolio and the risk-free asset, which is zero) Substituting the values,σp = √[(1.33 x 40%)² + ((1-1.33) x 0%)² + 2(1.33)(1-1.33)(0%)], σp = √[(53.2)² + (0)² + (0)], σp = √(2,831.24),
σp = 53.20% .
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Use the Sollow model to answer the following questions.
(a) Many say that if people save more, that’s bad for the economy: They say that spending money on consumer goods keeps the money moving through the economy. Does this model say that?
(b) Many people say that when machines and equipment get destroyed by bad weather or war, that makes the economy better off by encouraging businesses and families to spend money on new capital goods. Does this model say that?
Using the Solow model, the answer to (a) is no, saving more does not necessarily mean bad for the economy. It is true that spending money on consumer goods keeps money moving through the economy, however, saving money also contributes to economic growth, as it provides funds for businesses to expand and invest in capital goods, creating more jobs and increasing incomes.
The answer to (b) is also no. The Solow model does not suggest that destruction of machines and equipment makes the economy better off, as this does not increase the available capital. Rather, it suggests that economic growth is driven by investment in capital goods, technological progress, and increased labor supply.
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business plan software packages a. spawn creativity and flexibility on the part of the entrepreneur. b. offer a simple formula that leads startups to success. c. focus mostly on preparing slides to present the business concept to prospective investors. d. help an entrepreneur think through the important issues in starting a new company.
D. Business plan software packages help an entrepreneur think through the important issues in starting a new company.
Business plan software packages are designed to guide entrepreneurs through the process of creating a comprehensive business plan
What is Software Packages?
Software packages are pre-written computer programs or collections of programs that can be installed and used by individuals or organizations to perform specific tasks or functions.
Software packages are designed to help users solve specific problems or complete particular tasks. Examples of software packages include word processing software, spreadsheet software, presentation software, accounting software, graphics software, and many others.
These software packages provide tools and resources to help entrepreneurs think through the important issues in starting a new company, such as market analysis, financial planning, marketing strategy, and operations planning.
The software packages do not offer a simple formula that leads startups to success, as success depends on many factors, including market conditions, competition, management skills, and many other variables.
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company xyz had a long-standing relationship with a leading law firm. in fact, the law firm's business with this company was one of its most profitable relationships. if the law firm decides that it no longer wants to conduct business with the company, this is:
If the law firm decides it no longer wishes to conduct business with the company xyz, this would be known as a breach of long-standing relationship.
What is a breach of long-standing relationship?A long-standing relationship is a partnership that has existed for a long time. It might be between two individuals, businesses, or even governments. When a business relationship has lasted for an extended period, it is considered a long-standing relationship.
The goal of such partnerships is typically to establish mutual trust and dependability. Business partnerships or vendor contracts with established long-standing relationships can have a significant impact on profitability and stability.
When a long-standing partnership between a law firm and company xyz is terminated, it is known as a breach of long-standing relationship. It may occur as a result of various factors such as a change in management, a disagreement over business practices or objectives, or perhaps as a result of legal complications.
It may be as simple as one side deciding not to continue with the agreement or contract. Whatever the reason, when a long-standing partnership ends, it has a significant effect on both parties.
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the price of widgets has increased from $3 to $9, causing the quantity supplied to increase from 300 to 450 units. use the midpoint method to calculate the price elasticity of supply. provide your answer below:
Using the midpoint method, the price elasticity of supply is 2.5.
The midpoint method formula for calculating price elasticity of supply is:
(price change / average price) / (quantity change / average quantity)
First, we need to calculate the percentage change in price and quantity:
Price change = $9 - $3 = $6
Average price = ($3 + $9) / 2 = $6
% change in price = (price change / average price) x 100% = (6 / 6) x 100% = 100%
Quantity change = 450 - 300 = 150
Average quantity = (300 + 450) / 2 = 375
% change in quantity = (quantity change / average quantity) x 100% = (150 / 375) x 100% = 40%
Now we can plug these values into the formula:
(price change / average price) / (quantity change / average quantity) = (1.0 / 0.4) = 2.5
Therefore, the price elasticity of supply using the midpoint method is 2.5. This means that the quantity supplied is very responsive to changes in price, indicating that the supply of widgets is elastic.
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gold jewelers, a c corporation, has one shareholder. gold has a long-term note of $50,000 at an annual interest rate of 5%, which was outstanding the entire year. it distributes a $4,000 taxable dividend to its shareholder. its net income is $80,000, before considering any impact of the note or dividend on earnings. which of the following statements is true?
The correct statement is that the amount of interest expense on the note is $2,500. This is true for the following reasons: Interest expense is calculated by multiplying the amount of the loan by the annual interest rate (50,000 x 0.05 = 2,500). before any impact is considered, the net income is still $80,000.
Therefore, the interest expense for the entire year is $2,500.Gold's net income of $80,000 does not include any interest expense, so it must be added back. As a result, its earnings before taxes would be $82,500 ($80,000 + $2,500). As a result, the tax liability for the year is $17,860 ($82,500 x 21.6 per cent). Gold's tax liability would be reduced by the dividend distribution of $4,000, resulting in an actual tax liability of $13,860 ($17,860 - $4,000). As a result, the dividend distribution is taxed at a 20% rate. Therefore, the gross dividend is $5,000 ($4,000 / 0.80). The answer to this question is that the amount of interest expense on the note is $2,500.
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the annual cost of the electricity for the family showers, assuming that 2.5 gallons per minute of the water used is from the hot-water heater
Annual cost of the electricity for the family showers is $322.50
The annual cost of electricity for the family showers depends on several factors, including the rate per kilowatt-hour charged by the utility company, the wattage of the hot-water heater, and the amount of water used. To calculate the cost, you will need to multiply the kilowatt-hour rate by the wattage of the hot-water heater, then multiply that number by the number of hours per year in which hot water is used, and then divide by 1000 to convert from watts to kilowatts. Specifically, you need to calculate:
Annual Cost = (Kilowatt-hour rate x Wattage of hot-water heater x Number of hours per year in which hot water is used) / 1000
For example, if the kilowatt-hour rate is $0.10, the wattage of the hot-water heater is 4,500 watts, and the amount of water used is 2.5 gallons per minute, then the annual cost of electricity for the family showers would be:
Annual Cost = (0.10 x 4,500 x 7,300) / 1000 = $322.50
Q: The annual cost of the electricity for the family showers, assuming that 2.5 gallons perminute of the water used is from the hot-water heater (2 points—1 point for correct setup and 1 point for correct answer with units)
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Haley just graduated from college. She accepted a position with a firm at an annual salary of $45,000. Using HUD guidelines, what is the maximum Haley should pay for rent on a O monthly basis? O A $13,500. O B. $4,500. O C. $1,125. O D. $1,500.
all else constant, and assuming positive interest rates, an increase in the interest rate will cause the present value of some amount of money to be received in the future (for example, $1000 to be received exactly 15 years from today) to ____. and, all else constant, an increase in the number of periods (for example, $1000 to be received 20 years from today instead of 15 years from today) will cause the present value of some amount of money to be received in the future to____1) increase; increase 2) decrease; decrease . 3) decrease; increase 4) increase; decrease
The stockholders' equity accounts of Vaughn Company have the following balances on December 31, 2020.
Common stock, $10 par, 281,000 shares issued and outstanding: $2,810,000
Paid-in capital in excess of par-common stock: 1,220,000
Retained earnings: 5,600,000
Shares of Vaughn Company stock are currently selling on the Midwest Stock Exchange at $34.
Prepare the appropriate journal entries for each of the following cases. (Credit account titles are automatically Indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.)
(a) Astock dividend of 6% is (1) declared and (2) issued.
(b) A stock dividend of 100% is (1) declared and (2) issued.
(c) A2-for-1 stock split is (1) declared and (2) issued.
The answer to this question is as follows: Journal Entries for (a) A stock dividend of 6% is declared and issued:
The calculation of the stock dividend is: $2,810,000 × 6% = $168,600. 281,000 shares × 6% = 16,860 shares, with a market value of $34 per share or $573,240 in totaled. Retained Earnings $168,600Cr. Common Stock Distributable $28,100Cr. Paid-in Capital in Excess of Par - Common Stock Distributable $140,500Cr. Paid-in Capital from Stock Dividend Distributable $573,240Journal Entries for (b) A stock dividend of 100% is declared and issued:The calculation of the stock dividend is: 281,000 shares × 100% = 281,000 new shares, with a market value of $34 per share or $9,554,000 in total.Dr. Retained Earnings $2,810,000Cr. Common Stock Distributable $2,810,000Dr. Paid-in Capital in Excess of Par - Common Stock $6,744,000Cr. Common Stock $6,744,000Journal Entries for (c) A 2-for-1 stock split is declared and issued: After the stock split, Vaughn Company would have 562,000 common shares outstanding, with a $5 par value and a $34 market price per share.No journal entries are needed.
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What is the definition redlining?
Redlining is the discriminatory practice of denying services or access to certain neighborhoods, based on the racial or ethnic composition of the area.
The term originated in the 1930s, when the federal government created maps of urban areas, color-coding them based on perceived levels of risk for mortgage lenders. Areas deemed "high-risk" were often predominantly non-white, and were frequently denied access to loans, insurance, and other financial services, even if the individual applicants were financially stable.
The practice of redlining has had significant negative effects on affected communities, limiting their access to housing, credit, and economic opportunities. It has contributed to the persistent racial and economic inequality that still exists in many areas today.
In the United States, redlining is now illegal under the Fair Housing Act, which prohibits discrimination in housing and lending practices based on race, color, religion, national origin, sex, disability, and familial status.
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When an advertiser is assessing an advertisement's impact through pretesting, what is most likely to be measured?
1) whether or not the ad is likely to be recalled by the audience
2) whether or not the firm is making any money on the product or service in the ad
3) whether or not the ad is going in one medium or multimedia
4) whether or not the various elements in the proposed ad match the intended message
When an advertiser is assessing an advertisement's impact through pretesting, the most likely factor that will be measured is whether or not the various elements in the proposed ad match the intended message. Therefore, option 4 is the correct answer.
Pretesting is a strategy used in the advertisement process to evaluate an ad's potential effectiveness and help identify areas that require modification before the ad is released. It's usually done with small groups of individuals before the ad is launched to a wider audience.
There are various measures that an advertiser can use to pretest their ad. They include the following:
whether or not the ad is likely to be recalled by the audience, whether or not the firm is making any money on the product or service in the ad, whether or not the ad is going in one medium or multimedia, and whether or not the various elements in the proposed ad match the intended message.However, the primary goal of pretesting is to ensure that the ad is appropriately targeted to the right audience and meets the communication objectives.
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In 2024, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2026. Information related to the contract is as follows:
2024 2025 2026
Cost incurred during the year $ 2,640,000 $ 2,300,000 $ 2,926,000
Estimated costs to complete as of year-end 6,160,000 2,660,000 0
Billings during the year 2,080,000 2,860,000 5,060,000
Cash collections during the year 1,840,000 2,800,000 5,360,000Westgate recognizes revenue over time according to percentage of completion.
Required:
1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.
The amount of revenue and gross profit (loss) recognized in 2024 are $2,640,000 and $0.2025 respectively, in 2025 are $4,910,000 and $30,000.2026 respectively, and in 2026 are $10,000,000 and $134,000 respectively.
The calculation of revenue and gross profit (loss) to be recognized in each of the three years is discussed below:
Calculation for 2024:As the contract was entered in 2024, the percentage of work done would be (2,640,000 / 10,000,000) = 0.264 or 26.4%.
Revenue recognized would be 0.264 × $10,000,000 = $2,640,000.
Gross profit: Gross profit for the year 2024 would be $2,640,000 - $2,640,000 = $0.2025
As the work continues to be done, the revenue earned will be increased by the end of each year.
Calculation for 2025:As of 2025, the percentage of work done would be (2,640,000 + 2,300,000) / 10,000,000 = 0.491 or 49.1%.
Revenue recognized would be 0.491 × $10,000,000 = $4,910,000.
Gross profit: Gross profit for the year 2025 would be $4,910,000 - [(2,640,000 + 2,300,000)]= $30,000.2026
Calculation for 2026:As the work is completed in 2026, the percentage of work done is 100%.
Therefore, the revenue to be recognized would be $10,000,000.
Gross profit: Gross profit for the year 2026 would be $10,000,000 - [(2,640,000 + 2,300,000 + 2,926,000)] = $134,000.
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Universal Foods issued 10% bonds, dated January 1, with a face amount of $220 million on January 1, 2021. The bonds mature on December 31, 2040 (20 years). The market rate of interest for similar issues was 12%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight-line method. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Required:
1. Determine the price of the bonds at January 1, 2021.
Table values are based on:
n = i = % Cash Flow Amount Present Value
Interest Principal Price of bonds 2. to 4. Prepare the journal entries to record their issuance by Universal Foods on January 1, 2021, interest on June 30, 2021 and interest on December 31, 2028.
The price of the bonds issued by Universal Foods on January 1, 2021 with a face amount of $220 million.
On January 1, 2021 the price of the bonds with a face amount of $220 million and a 10% rate of interest paid semiannually is $174,504,621.80.
The journal entries to record the issuance of the bonds on January 1, 2021, interest on June 30, 2021 and interest on December 31, 2028 are as follows:
January 1, 2021
Cash 174,504,621.80Bonds Payable 220,000,000.00Discount on Bonds Payable 45,495,378.20June 30, 2021
Interest Expense 1,800,000.00Interest Payable 1,800,000.00December 31, 2028
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true or false: a consequence of technological advances on organizations is the ongoing collection of data that is placed in a data warehouse and is available as primary data that could be useful for understanding business problems and for improving decisions.
The given statement is "a consequence of technological advances on organizations is the ongoing collection of data that is placed in a data warehouse and is available as primary data that could be useful for understanding business problems and for improving decisions" is True.
By having access to a data warehouse, organizations can understand customer needs, make informed decisions about products and services, and even determine which markets to enter.
A data warehouse is a database that is used to store large amounts of data from a variety of sources. This data can include sales figures, customer information, market research, and other types of data. All of this data is collected and stored in the data warehouse and is then used by the organization to analyze and improve their operations.
Data warehousing allows organizations to gain a better understanding of their customers and their market. This can help them make decisions about what products and services to offer and where to target their marketing efforts. It can also be used to identify areas of improvement in the organization and develop strategies for increasing efficiency and profitability.
In conclusion, data warehousing is an important consequence of technological advances on organizations. It allows organizations to collect, store, and analyze large amounts of data, which can be used to improve operations and make better decisions.
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select the agency or method (direct) that is used to collect royalties for a mechanical license. a. a public performance organization (ascap), (b.m.i.), (gmr), or (s.e.s.a.c.) b. the harry fox agency (h.f.a.) c. the william morris agency the mechanical licensing collective (m.l.c.) d. sound exchange the recording industry association of america (r.i.a.a.) e. no representation organization/license must be acquired with direct negotiations.
The correct answer is option B, The Harry Fox Agency (HFA). HFA is an organization that helps to secure and administer mechanical licenses for the reproduction of copyrighted works.
It works directly with copyright owners and publishers to collect royalties for mechanical licenses, and acts as a middleman between the two parties to ensure that the copyright owners are paid properly for the usage of their works. HFA also works with digital service providers to help them acquire the proper mechanical licenses for their content. In addition, it provides services for registration and tracking of copyrighted works and royalty payments. The other options listed in the question are all organizations that provide services related to public performance, such as collecting performance royalties from radio, TV, clubs, etc. They are not responsible for mechanical licenses.
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when firms issue , the amount of interest and principal to be paid is based on specified market conditions. the amount of the repayment may be tied to a treasury bond price index or even to a stock index. a. leveraged notes b. structured notes c. stripped securities d. auction-rate securities
The correct option is b) structured notes. Structured notes are used by financial advisors to create a tailored investment product for their clients based on the client's risk preferences and investment objectives.
What are structured notes?
Structured notes are debt securities that combine a bond with an embedded derivative to offer a product with customized risk-return characteristics. These are debt securities that contain a bond component and an option component.
The underlying bond is the issuer's debt obligation, whereas the derivative component provides a varying payoff depending on the performance of an underlying asset or index, such as stocks, commodities, or currencies.
When firms issue structured notes, the amount of interest and principal to be paid is based on specified market conditions. The quantity of the reimbursement can be tied to a treasury bond fee index or maybe to a inventory index.
These notes have become more popular with retail investors due to their flexibility and potential to offer higher returns than traditional fixed-income securities.
The option b) structured notes is correct.
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investment is financed by which of the following? i. government spending ii. national saving iii. borrowing from the rest of the world
The investment is financed by national savings, borrowing from the rest of the world, and by printing money. Option B and option C are correct answers.
Investment is the act of allocating resources, particularly money, with the hope of earning an income or profit. The way to finance investment can differ. The money required for investment in any economy or business can come from several sources. National savings and borrowing from the rest of the world can finance investment.
Government spending also has a significant impact on the economy, but it is not a direct source of investment financing.
Therefore, option B and option C are correct answers.
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Suppose a $10 tax is placed on a good. The more inelastic the supply of the good, the
- more of the tax will be paid by the sellers.
- smaller the increase in the after-tax price.
- larger the decrease in the quantity sold.
- more of the tax will be paid by the buyers.
Sellers are more likely to pass on more of the tax cost to buyers in the form of a higher after-tax price when supply is inelastic because they are less able to react to tax-induced price drops. As a result, sellers suffer a greater part of the tax burden.
The effects of a tax on a good influence both purchasers and sellers. The after-tax price for purchasers will go up, whilst the after-tax price for sellers would go down. The elasticity of supply and demand determines how much of the tax burden each party will pay. The seller may simply change the quantity given in response to the price reduction when supply is elastic, though. As a result, the seller will be able to charge the purchasers a greater after-tax price while also shifting more of the tax burden to them. The seller's portion of the tax liability is comparatively lower in this situation. Generally, the less elastic the good's supply is. Overall, the more inelastic the supply of the good, the more of the tax burden will be borne by the sellers.
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