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Aleks [24]
3 years ago
9

On December 1, Miser Corporation exchanged 6,000 shares of its $25 par value common stock held in treasury for a parcel of land

to be held for a future plant site. The treasury shares were acquired by Miser at a cost of $40 per share, and on the exchange date the common share of Miser had a fair value of $50 per share. Miser received $18,000 for selling scrap when an existing building on the property was removed from the site. Based on these facts, the land should be capitalized at what amount?
Business
1 answer:
Bond [772]3 years ago
4 0

Answer:

Capitalized value $582.000.

Explanation:

Step 1. Given information.

  • The common share of Miser had a fair value of $50 per share.

Step 2. Formulas needed to solve the exercise.

  • Fair value of shares = Price per share * (Amount by selling scrap -        exchanged shares)
  • Capitalized value = fair value of shares - value of scrap.

Step 3. Calculation.

Fair value of shares = $50 * (18.000 - 6.000) = $600.000

<em />

<em>Land should be capitalized by fair market value of share exchanged less any recovery of scrap as land will be developed for future plant.  </em>

Step 4. Solution.

<em />

Fair value of shares = $50*12.000 = $600.000  

Less: value of scrap = $18.000  .

Capitalized value = $600.000   - $18.000 = $582.000.

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Questions

The Manchester Corporation manufactures wooden pictures frames. In order to better manage costs, the Manchester Corporation had previously developed the following standards for the manufacture of its product:

Each unit should have 3/4 of a pound of direct materials purchased at $12 per pound.

Each unit should be produced in 48 minutes at a direct labor cost of $16 per hour. The company had the following detailed retails:

Actual production was 20,000 units using 14,600 pounds of direct materials at a total cost of $168,000 and required 11,000 direct labor hours at a total cost of $190,000.

What is the company cost variance related to direct labour

Answer:

Direct labour cost total Variance  = $66,000 favorable

Explanation:

The direct labor cost total variance is the difference between standard labour cost of the actual production achieved and the actual labour cost.

The standard labour cost of labour per unit of output is not given. So, we work it out first

Standard labour cost per unit= 48/60× $16= 12.8 per unit

                                                                                                   $

20,000 units should have cost (20,000× 12.8)                256,000

but did cost                                                                      <u>   190,000</u>

Direct labour cost total Variance                                     <u>   66,000 </u>favorable

Direct labour cost total Variance  = $66,000 favorable

7 0
3 years ago
In a closed​ economy, the values for​ gdp, consumption​ spending, investment​ spending, transfer​ payments, and taxes are as​ fo
BartSMP [9]

Answer:

Private saving = $2 trillion

Public saving = $1 trillion

Explanation:

Private saving = GDP - Taxes + Transfer payments - Consumption spending

= Y - T + TR - C

= $11 - $2 + $1 - $8

= $2 trillion

Public saving = Taxes - Government spending - Transfer payments

= T - G - TR

= $2 - $0 - $1

= $1 trillion

Therefore;

Private saving = $2 trillion, Public saving = $1 trillion

3 0
3 years ago
Nysa works in an electricity distribution company’s customer service department. One day she gets a call from a customer who is
jolli1 [7]

Answer: The correct answer is empathy!

Explanation:

She put herself in the customers shoes and voiced that she was understanding. She was also patient but they emphasized how considerate she was in the example, so empathy is the answer ;)

8 0
3 years ago
Read 2 more answers
Many commodities have futures markets associated with them. A futures market is a prediction market that aggregates information
arlik [135]

Answer:

Answer is explained in the explanation section below.

Explanation:

Solution:

a.

Unleaded fuel prices are expected to fall by June 2019 according to future demand forecasts.

Since the future price is less than the spot price, it would be better for long-term buyers who can wait for the price to increase because the market is currently in BACKWARDATION. This happens due to a short-term disparity in demand and supply.

b.

If the information in this sector is reliable and impartial, the expected June price will most likely be similar to the real price we will see in June.

It is reliable if the market is accurate and impartial, i.e. the market research on which knowledge flows.

The prices of goods are either integrated or expressed in such a flow of knowledge.

So, if it's unbiased and reliable, the forecast prices would be reasonably similar to the real future price.

5 0
3 years ago
In Year 1, Lee Inc. billed its customers $62,000 for services performed. The company collected $51,000 of the amount billed. Lee
PIT_PIT [208]

Answer:

Lee Inc.

a. Amount of revenue Lee will report on the Year 1 income statement:

= $62,000

b. Amount of cash flow from revenue to report on the statement of cash flows:

= $51,000

c. The net income for the period:

= $23,000

d. The net cash flow from operating activities for the period:

= $20,000

e. The amount of net cash flow from investing activities:

= ($21,000)

f. The amount of net cash flow from financing activities:

= $40,000

f. Amounts of total assets, liabilities, and equity on the year-end balance sheet:

Total assets = $71,000

Total liabilities = $8,000

Total Equity = $63,000

Explanation:

a) Data and Calculations:

Service Revenue = $62,000

Cash collection from customers $51,000

Outstanding (Accounts Receivable) $11,000 ($62,000 - 51,000)

Operating expense on account = $39,000

Cash paid on account  31,000

Outstanding (Accounts Payable) $8,000

Common Stock $40,000

Land $21,000

b) Cash Account:

Cash collection from customers $51,000

Cash paid on account                   (31,000)

Common Stock                              40,000

Land                                              (21,000)

Cash balance                              $39,000

c) Income Statement:

Service Revenue   $62,000

Expenses                (39,000)

Net Income           $23,000

d) Assets:

Cash                         $39,000

Accounts Receivable   11,000

Land                            21,000

Total                          $71,000

e) Liabilities:

Accounts Payable      $8,000

Common Stock          40,000

Net Income                23,000

Total                          $71,000

f) Statement of Cash Flows:

Operating activities:

Cash collection from customers     $51,000

Cash paid to suppliers                      (31,000)

Net cash from operating activities $20,000

Investing activities:

Land                                                ($21,000)

Financing activities:

Common Stock                               $40,000

3 0
3 years ago
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