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Soloha48 [4]
3 years ago
11

Norma Smith is the controller of Bramble Corporation and is responsible for the preparation of the year-end financial statements

. For each of the following transactions that occurred during the year, indicate the dollar amount to be reported as a current liability as of December 31, 2017. (Enter 0 for amounts if no current liability is to be reported)
(a) On December 20, 2017, a former employee filed a legal action against Bramble for $103,150 for wrongful dismissal. Management believes the action to be frivolous and without merit. The likelihood of payment to the employee is remote.

(b) Bonuses to key employees based on net income for 2017 are estimated to be $192,900.

(c) On December 1, 2017, the company borrowed $900,000 at 8% per year. Interest is paid quarterly.

(d) Accounts receivable at December 31, 2017, is $10,145,500. An ageing analysis indicates that Bramble?s expense provision for doubtful accounts is estimated to be 3% of the receivables balance.

(e) On December 15, 2017, the company declared a $3.50 per share dividend on the 41,810 shares of common stock outstanding, to be paid on January 5, 2018.

(f) During the year, customer advances of $193,100 were received; $57,900 of this amount was earned by December 31, 2017.
Business
1 answer:
melisa1 [442]3 years ago
6 0

Answer:

Current liability refers to the short term obligations of the firm which need to be settled down within a period of one year or within a normal operating cycle.

(a) $0 would be reported as current liability, as it is not a current liability. It is a contingent liability.

(b) The amount of current liability is $192,900 because it is a liability of a firm to pay bonuses to the employees.

(c) The amount of current liability is as follows:

= $900,000 × 0.08 × (1/12)

= $6,000

Payment of interest on loan is a liability of the firm.

(d) $0 would be indicated in current liability, because provision for doubtful accounts is subtracted from the total accounts receivable to determine the net account receivables.

(e) Proposed dividend is a part of current liability and the amount of dividend to be shown as current liability is as follows:

= Dividend per share × No. of shares outstanding

= $3.50 per share × 41,810

= $146,335

(f) Customer advances is a current liability and the amount of customer advances to be reported in current liability is calculated as follows:

= Customer advances - Amount earned this year

= $193,100 - $57,900

= $135,200

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Holtzman Clothiers's stock currently sells for $31.00 a share. It just paid a dividend of $1.00 a share (i.e., D0 = $1.00). The
Llana [10]

Answer:

1. Year 1 expected value = $32.24

2. Required rate of return = 7.35%

Explanation:

1. For computing the stock price which is expected 1 year from now is shown below:

= Current Price × (1+rate)^number of years

= $31 × (1+0.04)^1

= $31 × 1.04

= $32.24

Hence, the expected 1 year value of stock price is $32.24

2. The required rate of return is computed by using an formula which is shown below:

= (Current Year dividend ÷ Current stock price)+ growth rate

where,

current year dividend is = D1

And, D1 = DO × (1+g)

where,

DO = previous dividend share

g = growth rate

So, $1 × (1+0.04)

= $1 × 1.04

= $1.04

Now apply these values to the above formula

So, required rate of return is equals to

= ($1.04 ÷ $31) + 0.04

= 7.35%

Hence, the required rate of return is 7.35%

5 0
3 years ago
According to OSHA standards, a competent person is defined as one who is capable of identifying existing and predictable hazards
Olin [163]

Answer:

True

Explanation:

OSHA standards are health and safety rules that an employer must put in place to ensure the safety of employees and reduce hazards in the workplace.

Different standards are applicable to different industries like the construction , maritime and other industries.

A competent person , according to the standard is one who is capable of identifying existing and predictable hazards in the surroundings , or working conditions which are unsanitary , hazardous or dangerous to employees and who has authorization to take prompt corrective measures to eliminate them.

6 0
2 years ago
Because other firms are willing to pay to advertise with them, suppliers of nonrival private goods often modify their products t
OLEGan [10]

Answer:

b. Public Goods

Explanation:

Public Goods -

It is the type of goods and services , which each and every person can use , without any kind of restriction , is known as public goods .

These type of goods are considered to be non - rivalrous , i.e. ,  these goods do not reduce , irrespective of their usage .

And ,

are non - excludable , i.e. , these goods are open for all and some individual or group van not hold on to it .

The example of public goods are - public parks , sewer system , law enforcement etc .

7 0
3 years ago
Crispy Fried Chicken bought equipment on January 2​, 2016​, for $ 18 comma 000. The equipment was expected to remain in service
qaws [65]

Answer:

Please check the attached image for the depreciation schedule

2. Units of production method

Explanation:

Book value in year 1 = Cost of asset - Depreciation expense of year 1

Book value in year in subsequent years = previous book value - that year's depreciation expense

Accumulated depreciation is sum of deprecation expense

Straight line depreciation expense = (Cost of asset - Salvage value) / useful life

($18,000 - $3,000) / 4 = $3,750

Depreciation expense each year of the useful life is $3,750

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

Deprecation factor = 2 x (1/useful life) = 0.5

Depreciation expense in year 1 = 0.5 x $18,000 = $9,000

Book value = $18,000 - $9,000 = $9,000

Depreciation expense in year 2 = 0.5 × $9,000 = $4,500

Book value = $9,000 - $4,500 = $4,500

Depreciation expense in year 3 = 0.5 x $4,500 = $2250

Book value = $4,500 - $2250 = $2250

Depreciation expense in year 4 = 0.5 × $2250 = $1125

Depreciation expense using the unit of production method =( Total production in the year/ total productive capacity) × (cost of asset - Salvage value)

Depreciation expense in year 1 = ($18,000 - $3,000) x (300 / 3000) = $1,500

Depreciation expense in year 2 =18,000 - $3,000) x (900 / 3000) = $4,500

Depreciation expense in year 3 = (18,000 - $3,000) x (1200 / 3000) = $6,000

Depreciation expense in year 3 = (18,000 - $3,000) x (600 / 3000) = $3,000

The Units of production method tracks wear and tear accurately because deprecation depends on the production each year.

I hope my answer helps you

6 0
3 years ago
With relevant examples discuss intangible business property that is protected by law and which an entrepreneur should consider w
ipn [44]

Answer:

Explanation:

Intangible property are useful resources, they are asset that are not physical but they produce much economic benefits to organization , entrepreneur.some of this asset are Goodwill, brand recognition, as well as intellectual property.

Some of these intangible asset are intellectual property and are protected by law from stealing away by those that are not authorized to it.

Examples of intangible business property that is protected by law are:

✓patent

✓copyright

✓ franchises

✓trade mark

✓Goodwill

✓tradenames

✓ trade secret

1)Patent is one of the intangible asset granted by government and protected to an inventor who is entrepreneur that exclude others from selling as well as using the invention for particular period of time. If an entrepreneur comes up with an invention it will be protected for him/ her. it can be categorized as utility, design, and plant. Example of invention that falls under utility is microwave oven. Other invention are light bulb, printing press.

2) copyright is another intangible property, in which the original works of authorship of an entrepreneur is protected, dramatic, musical work as well as computer software, and architecture of an entrepreneur is protected, this will help the entrepreneur to enjoy the benefits of his/her labor and to grow fast in term of finance.

3)trademark is another intangible property that is protected by law which includes design, expresion, sign that identifies the product of a company from another, when an entrepreneur is starting a business , trademark is important because his/her product will be easier to identify by consumer and this helps business to grow faster. Example is the logo that Apple( apple shape with a bite) uses as trademark on all their products, swoosh logo that Nike uses on their products

4)trade secrets is an intangible property as well as intellectual property that is been protected by law it contains processes, design, information with inherent economic values that are not generally known by everyone, this is important to enterprenurer because trade secret helps the individual with the secret to sustain his/her business without been hijacked. Example of trade secret is the

secret formula for Coca-Cola which other soft drinks producer doesn't know.

5 0
2 years ago
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