Since 2002, health care costs in the united states have risen by an average of ____

Effect of Inventory Errors

pav-90 [236]

Answer:

Effect of Inventory Errors

1. Kate Interiors Company:

Ending Inventory of $378,500 counted as $366,900.

This shows that Ending inventory is undervalued by $11,600 ($378,500 - 366,900).

The cost of goods sold will be overstated by $11,600 and the net income understated by $11,600 in the income statement.

In the balance sheet, the assets are understated by $11,600 and Equity (Retained Earnings) understated by the same amount.

2. Waterjet Bath Company:

Ending Inventory of $719,880 counted as $728,660.

This shows that Ending inventory is overvalued by $8,780 ($728,660 - 719,880).

The cost of goods sold will be understated by $8,780 and the net income overstated by $8,780 in the income statement.

In the balance sheet, the assets are overstated by $8,780 and the Equity (Retained Earnings) overstated by $8,780.

Explanation:

An overstatement of Ending inventory results in understated cost of goods sold and overstated net income. Conversely, an understatement of ending inventory results in overstated cost of goods sold and understated net income.

7 0

3 years ago

Laurel, Inc., and Hardy Corp. both have 6 percent coupon bonds outstanding, with semiannual interest payments, and both are curr

stealth61 [152]

Answer:

A. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds?

Laurel, Inc. = -8.11%

Hardy Corp. = -18.91%

B. If interest rates were to suddenly fall by 2 percent instead, what would the percentage change in the price of these bonds be then?

Laurel, Inc. = +8.98%

Hardy Corp. = +25.49%

Explanation:

bonds with 6% semiannual coupons, sold at par $1,000

Laurel, Inc. bond maturity in 5 years

Hardy Corp. bond maturity in 18 years

the current price of a bond is the sum of the present value of its face value and coupons. I will use an annuity table to calculate PV of face value and an ordinary annuity table for the coupons:

Laurel, Inc.

market rate 4% = ($1,000 x 0.8203) + ($30 x 8.9826) = $820.30 + $269.48 = $1,089.78, % change = 89.78/1,000 = 8.98%

market rate 8% = ($1,000 x 0.6756) + ($30 x 8.1109) = $675.60 + $243.33 = $918.93, % change = -81.07/1,000 = -8.11%

Hardy Corp.

market rate 4% = ($1,000 x 0.4902) + ($30 x 25.489) = $490.20 + $764.67 = $1,254.87, % change = 254.87/1,000 = 25.49%

market rate 8% = ($1,000 x 0.2437) + ($30 x 18.908) = $243.70 + $567.24 = $810.94, % change = -189.06/1,000 = -18.91%

3 0

3 years ago

The type of unemployment associated with recessions is called:

kherson [118]

Answer:

cyclical unemployment

5 0

3 years ago

Using the information presented above, determine the following: Determine EPS for Net Income ('x2) $_____________________ (Round

taurus [48]

Question Completion:

Income Before Taxes (from ongoing operations) $2,470,000

Income Tax Rate (’x2) 30%

5% Preferred Stock ($100 Par, 10,000 shares issued)

Common Stock ($1 par, 600,000 shares issued, 500,000 outstanding)

Answer:

The company's EPS is:

= 3.46

Explanation:

a) Data and Calculations:

Income Before Taxes (from ongoing operations) (’x2)= $2,470,000

Income Tax Rate (’x2) = (30% * $2,470,000) = $741,000

Net Income after taxes = $1,729,000

5% Preferred Stock ($100 Par, 10,000 shares issued) = $1,000,000

Common Stock ($1 par, 600,000 shares issued, 500,000 outstanding)

Outstanding common stock = $500,000

EPS (Earnings per share) = Net income after taxes/No. of outstanding shares

= $1,729,000/500,000

= $3.458

b) The earnings per share (EPS) equals Company A's net profit after taxes divided by the number of its outstanding common stock shares. Using the EPS, it indicates how much money Company A makes for each share of its stock. As a widely used metric, a potential stockholder of Company A can use it to estimate Company A's value when combined with the price per share.

6 0

3 years ago

Suppose Ginger deposits $12,000 in cash into her checking account at the Bank of Skidoo. The Bank of Skidoo has no excess reserv

Alborosie

Answer:

The question is incomplete since the requirements are missing, but I guess that it deals with the bank's ability to create money.

When you deposit money into a bank account, the bank will then lend most of that money to other clients. This is possible due to the money multiplier = 1 / required reserve rate = 1 / 4% = 25

the total increase in money supply = $12,000 x 25 = $300,000

5 0

3 years ago

Since​ 2002, health care costs in the united states have risen by an average of​ _____ percent per year.

Since 2002, health care costs in the united states have risen by an average of _____ percent per year.