Explain how a person who pursued a career in accounting could succeed as an entrepreneur.

Generally, the payment of an accelerated death benefit is _______ to a recipient if the benefit payment is qualified.

IrinaK [193]

The correct answer is Tax free.

An Accelerated Death Benefit (ADB) enables the holder of a life insurance policy to obtain a portion of the death benefit from the insurer before passing away. The policyholder must typically have a terminal illness with a life expectancy of two years or fewer.

<h3>How are benefits for hastened death paid?</h3>

A lump amount may be provided as part of some hastened death benefits. With a benefit for a terminal disease, this happens more frequently. Payments for chronic illnesses are more frequently made. According to Schelhaas, some accelerated death benefit riders are simple because they pay a specific portion of the death benefit.

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8 0

1 year ago

The condensed financial statements of Marks Company for the years 2017-2018 are presented below: Marks Company Comparative Balan

kirill115 [55]

Answer:

Marks Company

Computation of Financial Ratios:

(a) Current ratio at 12/31/18 = Current Assets/Current Liabilities = $1,1350,000/$339,000 = 3.35

(b) Acid test ratio at 12/31/18 = (Current Assets - Inventory)/Current Liabilities = $760,000/$339,000 = 2.24

(c) Accounts receivable turnover in 2018 = Net Credit Sales/Average Accounts Receivable = $2,420,000/$328,000 = 7.37 times

(d) Inventory turnover in 2018 = Sales/Average Inventory = $2,420,000/$357,000 = 6.77 times or every 54 days.

(e) Profit margin on sales in 2018:

i) Gross Profit Margin = Gross Profit/Sales x 100 = $778,000/$2,420,000 x 100 = 32%

ii) Net Profit Margin = Net Income/Sales x 100 = $278,000/$2,420,000 x 100 = 11.49%

(f) Earnings per share in 2018 = Earnings or Net Income divided by outstanding number of shares = $278,000/152,100 = $1.82

(g) Return on common stockholders’ equity in 2018 = Net Income divided by Common Equity = $278,000/$1,961,000 x 100 = 14.18%

(h) Price earnings ratio at 12/31/18 = Market price per share divided by earnings per share = $80/$1.82 = $43.95

(i) Debt to assets at 12/31/18 = Total Debts/Total Assets = $744,000/$2,705,000 x 100 = 27%

(j) Book value per share at 12/31/18 = Shareholders' Equity divided by number of outstanding shares = $1,961,00/152,100 = $12.89

Explanation:

a) Current Ratio = Current Assets/Current Liabilities

Current Assets for 2018:

Cash $404,000

Accounts Receivable $356,000

Inventories $375,000

Total = $1,135,000

Current Liabilities for 2018:

Accounts Payable $339,000

Dividends Payable $0

Total = $339,000

This liquidity ratio measures the entity's ability to pay off its current obligations with its liquid assets. Current assets are assets that can easily be turned to cash within the calendar year.

b) Acid Test Ratio is also a liquidity ratio that evaluates an entity's ability to pay off its current obligations with current assets when inventory is excluded. Inventory is not regarded as very liquid, especially given the longer time it may take to turn it over to cash.

c) Accounts Receivable Turnover measures the effectiveness of the company to collect its receivables resulting from the credit sales. It shows how sales on credit are managed by evaluating the credit policy, collection process, and customers' creditworthiness. In quantitative terms, it measures how many times receivables are converted to cash in a period.

d) Inventory Turnover measures the number of times average inventory was turned over to sales within a period. The average inventory is the beginning and ending inventories divided by 2. It is very useful in inventory decisions, especially pricing, production or purchase, etc.

e) Profit margin on sales is the gross profit or net income expressed as a percentage of sales. The Gross profit margin measures the ability of management to create profit from its sales revenue when compared with the costs of sales. The net profit margin measures the ability of the management to create value for the stockholders after deducting all expenses for running the business.

f) Earnings per share: This is a profitability ratio that compares the net income to the number of outstanding shares.

g) Return on common stockholders’ equity: This ratio measures the company's ability to generate returns for common stockholders. It is measured as net income for common equity divided by the common stockholders' equity.

h) Price earnings ratio: This ratio expresses the dollar amount which an investor can invest in a company in order to earn a dollar income. It is used to value investment in a company.

i) Debts to Assets: This is a financial leverage ratio that tells the percentage of assets or a company's resources that is financed by creditors.

j) Book value per share: This is a market value measure that shows the value of net assets (equity) divided by the outstanding shares. It is not the same as the market value per share, which reflects investors sentiments. The book value per share compares the book value of equity with the number of shares. It is used by investors to gauge if a stock is undervalued or not.

8 0

3 years ago

The following data are for the two products produced by Tadros Company. Product A Product BDirect materials$20 per unit $30 per

fenix001 [56]

Answer:

Tadros Company

Plantwide method:

Product A Product B

1.1. Manufacturing cost per unit $40 $85

1.2 Gross profit per unit $15 $135

2.1 Gross profit per customer $300 $675

2.2 Customer of customer to each customer is:

= $80

The gross profit is adequate for each customer.

ABC method:

Product A Product B

3.1The Manufacturing cost per unit $36.26 $101.61

3.2 Gross profit per unit $18.74 $118.39

4.1 Gross profit per customer $374.85 $591.94

4.2 Cost of customer service to each customer is $80.

The Gross profit per customer is adequate.

5. The ABC product costing method gives better information to managers of Tadros Company.

c. Activity-based costing method

Explanation:

a) Data and Calculations:

Product A Product B

Direct materials $20 per unit $30 per unit

Direct labor hours 0.5 DLH/unit 1.5 DLH per unit

Total direct labor hours 8,000 (0.5*16,000) 5,400 (1.5*3,600)

Direct labor costs $160,000 ($20*8,000) $108,000 ($20*5,400)

Machine hours 0.4 MH per unit 1.2 MH per unit

Batches 200 batches 360 batches

Volume 16,000 units 3,600 units

Engineering modifications 20 modifications 80 modifications

Number of customers 800 customers 720 customers

Market price $55 per unit $220 per unit

Direct labor rate = $20 per direct labor hour (DLH).

Overhead rates based:

a. Plantwide Method:

Total manufacturing overhead costs/Total direct labor hours

$268,000/13,400 = $20

Cost of production:

Product A Product B

Direct materials per unit $320,000 $90,000

Direct labor hours per unit DLH 160,000 108,000

Overhead costs 160,000 108,000

Total production costs $640,000 $306,000

Volume 16,000 units 3,600 units

Manufacturing cost per unit $40 $85

Income Statement:

Product A Product B

Sales Revenue ($55 and $220) $880,000 $792,000

Total production costs 640,000 306,000

Gross profit $240,000 $486,000

Volume 16,000 units 3,600 units

Gross profit per unit $15 $135

Gross profit $240,000 $486,000

Customers 800 customers 720 customers

Gross profit per customer $300 $675

b. Departmental Method:

c. ABC Method:

Additional information follows:

Cost Pools Overhead Costs Driver

Indirect manufacturing

Engineering support $ 53,600 Engineering modifications

Electricity 53,600 Machine hours

Setup costs 160,800 Batches

Nonmanufacturing

Customer service 121,600 Number of customers

Overhead rate using ABC:

Cost Pools Overhead Costs Driver Rates

Indirect manufacturing

Engineering support $ 53,600 100 modifications = $536

Electricity 53,600 10,720 Machine hours $5

Setup costs 160,800 560 Batches $287

Customer service 136,800 1,520 customers $90

Cost of production:

Product A Product B

Direct materials per unit $320,000 $90,000

Direct labor hours per unit DLH 160,000 108,000

Overhead costs:

Engineering support 10,720 42,880

Electricity 32,000 21,600

Setup costs 57,400 103,320

Total production costs $580,120 $365,800

Volume 16,000 units 3,600 units

Manufacturing cost per unit $36.26 $101.61

Income Statement:

Product A Product B

Sales Revenue ($55 and $220) $880,000 $792,000

Total production costs 580,120 365,800

Gross profit $299,880 $426,200

Volume 16,000 units 3,600 units

Gross profit per unit $18.74 $118.39

Gross profit $299,880 $426,200

Customers 800 customers 720 customers

Gross profit per customer $374.85 $591.94

Total production costs $580,120 $365,800

Customers 800 customers 720 customers

Cost per customer $725.15 $508.06

Customer service costs

Customer service $121,600/1,520 = $80

8 0

2 years ago

According to marx, the best economic system would be one where the means of production and distribution are in the hands of the

ololo11 [35]

Karl Marx is the founder of modern communism. Bourgeousie defines the capitalists, those who own the means of production and who take advantage of the labor (work) of the proletariat (the mass of workers who do not own the means of production and are not fairly compensated for their work).
<span>The statement that according to Marx, the best economic system would be one where the means of production and distribution are in the hands of the bourgeoisie is false. In contrast, according to Marx the best economic system would be </span><span>one where the means of production and distribution are in the hands of the proleteriat.</span>

3 0

3 years ago

Hank, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December, he performed $

ICE Princess25 [194]

Answer:

Hank

a. After-tax income if bill is sent in December

= $30,000 * 0.68 (1 - 0.32) = $20,400

Return on investment of $20,400 * 1.01% = $20,604

b. if bill is sent in January

= $30,000 * 0.65 (1 - 0.35) = $19,500

c. Hank should send the bill in December.

d. with marginal tax rate = 24% next year, after-tax income

= $30,000 * 0.76 (1 - 0.24) = $22,800

e. He should send his bill in January.

Explanation:

a) Data:

Value of legal services for a client = $30,000

Marginal tax rate = 32% this year and 35% or 24% next year

After-tax rate of return = 12%

b) The after-tax income represents the amount of Hank's revenue that remains after tax has been deducted or paid. It is what belongs to Hank after the taxman has taken his cut.

7 0

2 years ago