Elementary school treachery only need a community college or associates degree

Financial Statements of a Manufacturing Firm The following events took place for Sorensen Manufacturing Company during January,

Yakvenalex [24]

Answer:

Required a.

January income statement for Sorensen Manufacturing Company

Sales $1,200,000

Less Cost of Sales ($675,000)

Gross Profit $525,000

Less Expenses :

Selling expense ($215,000)

Administrative expense ($125,000)

Net Income / (Loss) $185,000

Required b.

Work In Process Inventory = $120,000

Finished Goods Inventory = $85,000

Explanation:

Manufacturing Cost Schedule (Determination of Work In Process Inventory)

Direct Materials $180,000

Indirect Materials ($250,000 - $180,000) $70,000

Direct Labor $450,000

Factory Overheads $180,000

Total Cost of Goods Manufactured $880,000

Less Transferred to finished goods ($760,000)

Closing Work In Process Inventory $120,000

Finished Goods T- Account (Determination of Finished Goods Inventory)

Debit :

Transferred from Work In Process $760,000

Totals $760,000

Credit:

Trading Account $675,000

Ending Finished Goods Inventory $85,000

Totals $760,000

7 0

4 years ago

The builder of a new movie theater complex is trying to decide how many screens she wants. Below are her estimates of the number

DochEvi [55]

Answer:

Part (a):

Make a table showing the value of the marginal product for each screen from the first through the fifth:

Solution:

The answer is attached.

Part (b):

How many screens will be built if the real interest rate is 5.5 percent?

Answer: 3 screens

Part (c):

How many screens will be built if the real interest rate is 7.5 percent?

Answer: 1 screen

Part (d):

How many screens will be built if the real interest rate is 10 percent?

Answer: 0 screens

Part (e):

If the real interest rate is 5.5 percent, how far would construction costs have to fall before the builder would be willing to build a five-screen complex?

Answer: $727,272.73(approx.)

Explanation:

Part (a):

Make a table showing the value of the marginal product for each screen from the first through the fifth:

Solution:

The solution is attached with working.

Part (b):

How many screens will be built if the real interest rate is 5.5 percent?

Solution:

3 screens

The interest cost of each screen = 5.5% x $1,000,000 = $55,000.

There are no other costs mentioned. The value of marginal product exceeds $55,000 for 3 screens.

Therefore, 3 screens should be built.

Part (c):

How many screens will be built if the real interest rate is 7.5 percent?

Solution:

1 screen

The value of the marginal product exceeds the interest cost (7.5% of $1,000,000, or $75,000) for only the first screen.

Thus, one screen will be built.

Part (d):

How many screens will be built if the real interest rate is 10 percent?

Solution:

0 screens

At 10% interest, the interest cost of a screen is $100,000, more than the value of the marginal product of even the first screen.

Thus, no screens will be built.

Part (e):

If the real interest rate is 5.5 percent, how far would construction costs have to fall before the builder would be willing to build a five-screen complex?

Solution:

The value of the marginal product of the fifth screen is $40,000. At an interest rate of 5.5%, building five screens is profitable only if 5.5% times the per-screen construction cost is no greater than $40,000.

Financial cost per screen = real interest rate x construction cost of per screen

$40, 000 = 5.5% x construction cost per screen Construction cost per screen = $40,000 ÷ 5.5%

= $727,272.73(approx.)

3 0

3 years ago

Pat Buhn is the new owner of Young Co. She has heard about internal control but is not clear about its importance for her busine

otez555 [7]

Answer: Physical safeguard & security, Accuracy, Segregation of duties, Handling errors

Explanation:

Internal control could be defined as the process of handling an organization accounting and auditing process with it's specified objectives in compliance with laws, regulations and policies.

Here are the four purpose of internal control;

a) Physical safeguard & security; this is to ensure that physical assets and information have a controlled asses, and it's not easily assessible by anyone.

b) Accuracy: this is to ensure that all transactions are accurate when records are checked with the source of information where the transaction took place and the time it occurred.

c) Segregation of duties; this ensures that one individual cannot have access to the recording of information and processing of transaction.

d) Handling errors; this ensures that errors are checked at any stage with transaction occurred with corrections also made

5 0

3 years ago

If the total deposits of the banking system are $400 billion, how much money could these reserves support if the required reserv

AURORKA [14]

$2,000 billion.

In order to find the reserve amount, you need to know the amount of total deposits and the required reserve ratio and whether the bank holds any excess reserve. Here, we have $400 billion of total deposits and a required reserve ratio of 0.2. You would divide the total deposits by the required reserve ratio to find the reserve amount.

$400 billion / 0.2 = $2,000 billion

6 0

3 years ago

Lahdekorpi OY, a Finnish corporation, owns 100 percent of Three- O Company, a subsidiary incorporated in the United States. Requ

RUDIKE [14]

Answer:

Lahdekorpi OY, a Finnish corporation and Three-O Company, a subsidiary incorporated in the United States

Transfer Pricing:

a) The best transfer pricing method in this case is the cost plus method. This gives the transfer price as Cost + 50%.

b) The appropriate transfer price should be $3 ($2 x 1.5).

Explanation:

Transfer pricing arises when controlled entities set prices for exchange of goods and services. When Lahdekorpi OY, a Finnish corporation, sells wooden puzzles to Three-O Company, given their relationship, transfer pricing has arisen. It is the assignment of cost for goods and services exchanged between related parties, like a parent and a subsidiary.

There are many Transfer Pricing methods which entities and the taxing authorities can use to determine the best transfer price. According to the Organisation for Economic Co-operation and Development (OECD) Multinational Entities and tax authorities can use any of these five main transfer pricing methods:

a) Comparable uncontrolled price (CUP) method. The CUP method is grouped by the OECD as a traditional transaction method (as opposed to a transactional profit method)

b) Resale price method

c) Cost plus method

d) Transactional net margin method (TNMM)

e) Transactional profit split method.

7 0

3 years ago