Expenses are recorded as costs of doing business whether cash was paid or not. True or False

What is the present discounted value of $10,000 that is to be received in 2 years if the market rate of interest is 4 percent?

ddd [48]

Answer:

PV = $9,245.56

Explanation:

Giving the following information:

Future value (FV)= $10,000

Number of periods (n)= 2 years

Discount rate (i)= 4% = 0.04

To calculate the present value (PV), we need to use the following formula:

PV = FV / (1 + i)^n

PV = 10,000 / (1.04^2)

PV = $9,245.56

7 0

3 years ago

Bryant Company has a factory machine with a book value of $93,100 and a remaining useful life of 5 years. It can be sold for $27

NISA [10]

Answer:

The old machine should be replaced.

Explanation:

Note: See the attached excel file for the the analysis showing whether the old machine should be retained or replaced.

From the attached excel file, the following calculation are made:

Variable Manufacturing cost of Retain = Initial Variable Manufacturing cost * remaining useful life of old machine = $592,600 * 5 = $2,963,000

Variable Manufacturing cost of Replace = New Variable Manufacturing cost * Remaining useful life of new machine = $505,500 * 5 = $2,527,500

From the attached excel, it can be observed that the total cost of Retain is $32,200 higher than the total cost of Replace. This therefore implies that the old machine should be replaced.

Download xlsx

6 0

3 years ago

Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 70:30 basis, respectively

Usimov [2.4K]

Answer:

Alex and Bess Partnership

Part A: Step-by-step Distribution:

Cash Noncash assets Liabilities Alex Bess

December 31 $48,000 $135,000 $36,000 $94,500 $52,500

Safe cash

distribution (26,400) 0 0 (18,480) (7,920)

1st Liabilities (21,600) 0 (21,600) 0 0

Sale of noncash 147,000 (135,000) 8,400 3,600

Safe cash distrib. (100,000) (70,000) (30,000)

Final liabilities (14,400) 0 (14,400) 0 0

Liquidation expense (4,100) 0 (2,870) (1,230)

Final distribution (28,500) 0 (11,550) (16,950)

Part B: Final Statement of Partnership Liquidation:

Cash Noncash assets Liabilities Alex Bess

December 31 $48,000 $135,000 $36,000 $94,500 $52,500

Sale of noncash 147,000 (135,000) 8,400 3,600

Payment of liabilities (36,000) (36,000)

Liquidation expenses (4,100) 0 (2,870) (1,230)

Distribution (154,900) 0 0 (100,030) (54,870)

Explanation:

a) Data and Calculations:

Profits and losses sharing ratio = 70:30

Estimated liquidation expenses = $5,500

Balance Sheet at Liquidation Date:

Cash $48,000 Liabilities $36,000

Noncash assets 135,000 Alex, capital 94,500

Bess, capital 52,500

Total assets 183,000 Total liabilities and capital $ 183,000

3 0

2 years ago

What is the relationship between a non-callable, option-free fixed rate bond's price and its yield?

Sophie [7]

Answer:

The relationship is that the price for these types of bonds is lower as the Yield is fixed and do not change over time.

The price of a Non-callable bond is cheaper than the price of the Callable bond as the Yield for a Non-callable bond is fixed. This suggest that the investor knows exactly what is the interest that is going to receive until the maturity of the bond.

5 0

3 years ago

Static Budget Actual Units 5,000 5,100 Sales revenue $60,000 $58,650 Variable manufacturing costs $15,000 $16,320 Fixed manufact

Ipatiy [6.2K]

Answer:

$700 favorable

Explanation:

Calculation to determine what The total sales-volume variance for operating income for the month of July would be

First step is to calculate the of contribution per unit using this formula

Contribution Margin per unit

=Sales− Variable manufacturing costs−Variable marketing and administrative expense/units

Let plug in the formula

Contribution Margin per unit=$60,000−$15,000−$10,000/5,000units

Contribution Margin per unit=$7per unit

Now let calculate the total sales-volume variance using this formula

Total sales volume variance

= Actual units−Static Budget × Static contribution margin per unit

Let plug in the formula

Total sales volume variance=5,100units−5,000units×$7

Total sales volume variance=$700 favorable

Therefore The total sales-volume variance for operating income for the month of July would be

$700 favorable

3 0

2 years ago