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NeX [460]
3 years ago
14

Blue Company reports the following costs and expenses in May.

Business
1 answer:
Inessa [10]3 years ago
7 0

Answer:

(a) Manufacturing overhead  = $176,700

(b) Product costs  =  $390,400

(c) Period costs = $72,390

Explanation:

a. The computation of the manufacturing overhead is shown below:

= Factory utilities + Depreciation on factory equipment + Property taxes on factory building + Indirect factory labor + Indirect materials + Factory repairs+ Factory manager salary

= $17,000 + $13,950 + $2,600 + $49,900 + $82,600 + $2,350 + $8,300

= $176,700

b. The computation of the product cost is shown below:

= Direct materials used + Direct labor + manufacturing overhead

= $141,700 + $72,000+ $176,700

= $390,400

c. The computation of the period cost is shown below:

= Sales salaries + Depreciation on delivery trucks + Repairs to office equipment + Advertising + Office supplies used  

= $47,500 + $4,700 + $1,900 + $15,500 + $2,790

= $72,390

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On January 1, 2018, Brian Company purchased at par $831,000, 6 percent bonds issued by Laura Company to be held as available-for
Leno4ka [110]

Answer:

THE TRANSACTION DATE : December 31, 2018.

TRANSACTION: Record the trading securities at fair value.

ASSETS: - 26,400

LIABILITIES:

STAKEHOLDERS' EQUITY: -26,400

REVENUE/GAINS:

EXPENSES/LOSSES: $26,400

NET INCOME: - 26,400

THE TRANSACTION DATE : July 1, 2019.

TRANSACTION: Adjust to fair value.

ASSETS: $29,800

LIABILITIES:

STAKEHOLDERS' EQUITY: $29,800

REVENUE/GAINS: $29,800

EXPENSES/LOSSES:

NET INCOME: $29,800

RECORD THE SALE OF TRADING SECURITIES(ASSETS) = $0.

Explanation:

So, anything dealing with trading securities has to do with trading in which securities are held down for a period of time and then later the securities will be sold.

So, here are the categories for the transactions listed in the question above, assuming the securities are available-for-sale.

THE TRANSACTION DATE : December 31, 2018.

TRANSACTION: Record the trading securities at fair value.

ASSETS: - 26,400

LIABILITIES:

STAKEHOLDERS' EQUITY: -26,400

REVENUE/GAINS:

EXPENSES/LOSSES: $26,400

NET INCOME: - 26,400

THE TRANSACTION DATE : July 1, 2019.

TRANSACTION: Adjust to fair value.

ASSETS: $29,800

LIABILITIES:

STAKEHOLDERS' EQUITY: $29,800

REVENUE/GAINS: $29,800

EXPENSES/LOSSES:

NET INCOME: $29,800

RECORD THE SALE OF TRADING SECURITIES(ASSETS) = $0.

3 0
3 years ago
Importers' bank usually issues a ________ to importers in international transactions.
Nezavi [6.7K]
<span>Importers' bank usually issues a letter of credit to importers in international transactions.

A letter of credit is issued by a bank, most common from another country, to guarantee the payment to be made under agreeable circumstances. This is a way to ensure and product the two people doing business that one will get the items and one will be paid for them. </span>
8 0
3 years ago
You purchased a ticket to the musical Hamilton through a verified reseller for $457.00. When your ticket arrives, you see that t
Anton [14]

Answer:

d.The face value is below the equilibrium price because the rate in the secondary market exceeds the face value.

Explanation:

Equillibrumnprice is defined as the price at which a buyer is willing to buy and a seller is willing to sell a product.

The buyer is willing to buy the ticket at $457 and the reseller also wants to sell at that price, so this is the equillibrum price.

The face value is $259 so it is less than the equillibrum price.

The rate in the secondary market is determining equillibrum price in this case.

5 0
3 years ago
ROI, Residual Income, and EVA with Different Bases Envision Company has a target return on capital of 12 percent. The following
lara [203]

Answer:

a. ROI = income / Assets      

                                      Book Value       Current Value    

Software Division              0.175              0.13    

Consulting Division           0.164              0.182    

Venture Capital Division   0.093            0.088

<u>Workings:</u>

i. Book value

Software Division = 12,250/70,000=0.175

Consulting Division = 16,400/100,000=0.164  

Venture Capital Division = 56,730/610,000 =0.093

ii. Current value

Software Division = 11,700/90,000=0.13

Consulting Division = 20,020/110,000=0.182

Venture Capital Division= 51,920/ 590,000=0.088

b. Residual income = Income - {Asset x Return on capital 12% }

                                      Book Value       Current Value    

Software Division              3850              900    

Consulting Division           4400              6820    

Venture Capital Division   -16470           -18880

<u>Workings:</u>

i. Book value

Software Division = 12,250-(70,000*12%)=3850

Consulting Division = 16,400-(100,000*12%)=4400  

Venture Capital Division = 56,730-(610,000*12%) =-16470

ii. Current value

Software Division = 11,700-(90,000*12%)=900

Consulting Division = 20,020-(110,000*12%)=6820

Venture Capital Division= 51,920-(590,000*12%)=-18880

c. Economic Value Added ( EVA ) = Net Income After Tax - ( Amount of Capital x Weighted Average Cost of Capital [WACC] )

C.                     Software Division  

                            (Value Base)  

                                    Book            Current

Sales                           100,000          100,000

Income                          12,250           11,700

Assets                           70,000          90,000

Liabilities                      10,000           10,000

Capital invested           60,000          80,000

(Asset - Liabilities)

Tax on Income(30%)     3675            3510

Income after Tax            8,575           8,190

(Income - Tax on

income) (A)

Capital invested             6,000           8,000

* WACC - 10% ) (B)

EVA (C)=(A)-(B)                2,575            190

                       Consulting Division

                            (Value Base)

                                     Book            Current

Sales                         200,000        200,000

Income                        16,400           20,020

Assets                         100,000        110,000

Liabilities                      14,000         14,000

Capital invested           86,000       96,000

(Asset - Liabilities)

Tax on Income(30%)     4920            6006

Income after Tax           11,480           14,014

(Income - Tax on

income) (A)

Capital invested           8,600            9,600

* WACC - 10% ) (B)

EVA (C)=(A)-(B)              2,880            4,414

                     Venture Capital Division

                           (Value Base)

                                   Book            Current

Sales                        800,000       800,000

Income                      56,730          51,920

Assets                       610,000        590,000

Liabilities                    40,000         40,000

Capital invested        570,000        550,000

(Asset - Liabilities)

Tax on Income(30%)    17019          15576

Income after Tax          39,711         36,344

(Income - Tax on

income) (A)

Capital invested           57,000       55,000

* WACC - 10% ) (B)

EVA (C)=(A)-(B)              -17,289       -18,656

8 0
2 years ago
The impact of inflation in businesses​
levacccp [35]

Answer:

Rapidly rising prices not only affect the price consumers pay, they also affect the cost businesses have to pay for materials and inventory. When replacement inventory costs more than the inventory you just sold, it can lead to inventory shortages.

Explanation:

I hope it helped

4 0
2 years ago
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