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3 years ago

The salaries of employees who spend all their time working in one department are:

1 answer:

3 0

Their salaries are DIRECT EXPENSES. Direct expenses refers to expenses incurred which vary directly with changes in the quantity of cost objects. Cost objects are items for which expenses are measured such as costs of materials used to manufacture a product.

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Which of the following accounts is not closed? Question 3 options: A. Depreciation expense B. Dividends C. Service revenue D. Ac

larisa [96]

Answer:

The answer is D. Accumulated depreciation

Explanation:

Accumulated depreciation is the sum total of the depreciation recorded for certain assets.

6 0

3 years ago

Short Company purchased land by paying $11,000 cash on the purchase date and agreed to pay $11,000 for each of the next six year

sergeinik [125]

Answer: $‭52,431.5‬0

Explanation:

The liability reported will be the present value of the six payments of $11,000.

Since this is a constant amount, it will be an annuity:

= 11,000 * Present value interest factor of an annuity, 6 years, 7%

= 11,000 * 4.7665

= $‭52,431.5‬0

<em>Any difference between this and any options given is down to rounding errors. Pick the closest figure. </em>

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2 years ago

Dickinson Company has $11,880,000 million in assets. Currently half of these assets are financed with long-term debt at 9.4 perc

Ronch [10]

Answer:

Dickinson Company

a) Effect of each plan on earnings per share:

Current Plan Plan D Plan E

Earnings per share $0.45 $0.36 $0.45

b-1) Earnings per share $0 $0 $0.14

b-2. Plan E would be most favorable if return on assets fell to 4.70%.

b-3 Earnings per share $0.93 $0.70 $0.76

b-4 Current Plan would be most favorable if return on assets increased to 14.4%.

c-1 Earnings per share $0.45 $0.36 $0.45

c-2 If the market price for common stock rose to $12 before the restructuring, Plan E would then be most attractive to the company as it would get additional paid-in capital of $1,485,000 ($4 * 371,250).

Explanation:

a) Data and Calculations:

Return on assets before interest and taxes = 9.4%

Tax rate = 40%

Current Plan Plan D Plan E

Assets $11,880,000 $11,880,000 $11,800,000

Long-term debt 5,940,000 5,940,000 2,970,000

New debt 2,970,000

Total debt 8,910,000

Common stock 5,940,000 5,940,000 8,910,000

Less repurchased shares (2,970,000)

New common stock 2,970,000

Interest rate of old debt 9.4% 9.4% 9.4%

Interest rate for new debt 11.4%

Stock par value $8 $8 $8

Return on assets before

interest and taxes $1,116,720 $1,116,720 $1,116,720

Interest expense 558,360 896,940 298,180

Return before taxes $558,360 $219,780 $837,540

Tax rate = 40% 223,344 87,912 335,016

Return after taxes $335,016 $131,868 $502,524

Shares outstanding 742,500 371,250 1,113,750

Earnings per share $0.45 $0.36 $0.45

Return on assets falling to 4.70%

Return on assets before

interest and taxes $558,360 $558,360 $558,360

Interest expense 558,360 896,940 298,180

Return before taxes $0 -$338,580 $260,180

Tax rate = 40% 0 0 104,072

Return after taxes $0 $0 $156,108

Shares outstanding 742,500 371,250 1,113,750

Earnings per share $0 $0 $0.14

Return on assets increasing to 14.4%:

Return on assets before

interest and taxes $1,710,720 $1,710,720 $1,710,720

Interest expense 558,360 896,940 298,180

Return before taxes $1,152,360 $431,380 $1,412,540

Tax rate = 40% 460,944 172,552 565,016

Return after taxes $691,416 $258,828 $847,524

Shares outstanding 742,500 371,250 1,113,750

Earnings per share $0.93 $0.70 $0.76

Market price for common stock rose to $12 before restructuring:

Return on assets before

interest and taxes $1,116,720 $1,116,720 $1,116,720

Interest expense 558,360 896,940 298,180

Return before taxes $558,360 $219,780 $837,540

Tax rate = 40% 223,344 87,912 335,016

Return after taxes $335,016 $131,868 $502,524

Shares outstanding 742,500 371,250 1,113,750

Earnings per share $0.45 $0.36 $0.45

6 0

3 years ago

Home Furnishings reports inventory using the lower of cost and net realizable value (NRV). Below is information related to its y

uysha [10]

Answer:

$43,030

Explanation:

IAS 2 Inventories states that inventory is to be recognized at cost, however, subsequent measurement requires that inventory be carried at the lower of cost or net realizable amount (NRV).

As such, where the cost of inventory is higher than the NRV, it is written down to the NRV using the following entries,

Debit Inventory write off/Cost of goods sold

Credit Inventory account

with the difference between the cost and the NRV.

Inventory Quantity Unit Cost Unit NRV New unit cost

Furniture 230 $88 $103 $88

Electronics 53 $430 $315 $315

From the analysis above, the cost of inventory is lower than the NRV for Furniture, hence no adjustment is required. However, the cost of Electronics is higher than the NRV hence a write down is required. This amount is

= ($430 - $315) × 53

=$115 × 53

= $6,095

Total recorded cost(ending) of inventory before any adjustment

= (230 × $88) + (53 × $430)

= $43,030

5 0

2 years ago

Based on the following data for the current year, what is the inventory turnover? Sales on account during year $700,000 Cost of

Elodia [21]

Answer:

2.7

Explanation:

The inventory turnover is defined as the ratio between the cost of merchandise sold during the year and the average inventory.

Average inventory can be defined as the mean between initial and ending inventory. The inventory turnover is:

$IT=\frac{\$270,000}{\frac{\$110,000+\$90,000}{2} } \\IT=2.7$

The inventory turnover ratio is 2.7.

3 0

3 years ago