Master Business with Fun Quizzes & Brain Teasers!

Blago Wholesale Company began operations on January 1, 20X1, and uses the average cost method in costing its inventory. Management is contemplating a change to the FIFO method in 20X2 and is interested in determining how such a change will affect net income. Accordingly, the following information has been developed: 20X1 20X2 Final inventory: Average cost $150,000 $255,000 FIFO 160,000 270,000 Condensed income statements for Blago Wholesale appear below: 20X1 20X2 Sales $1,000,000 $1,200,000 Cost of goods sold 600,000 720,000 Gross profit 400,000 480,000 Selling, general, and administrative 250,000 275,000 Net income $150,000 $205,000 Required: Based on this information, what would 20X2 net income be after the change to the FIFO method? Ignore any income tax effects of this change in accounting method.
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One of the Justices on the Supreme Court, stated that in this decision, the Supreme Court gave up power to gain power. What do you think this means?
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Year to date, Company Y had earned a 10.8 percent return. During the same time period, Company R earned 12.20 percent and Company C earned 1.56 percent. If you have a portfolio made up of 45 percent Y, 35 percent R, and 20 percent C, what is your portfolio return?
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The main difference between a matrix-style organization model and a cross-functional team is: Question 6 options: the matrix model has a limit on the number of functional units who send an expert to join the team, whereas the cross-functional team does not. the matrix model is a temporary arrangement, whereas the cross-functional team is a more permanent arrangement. the matrix model shares leadership responsibilities within the group, whereas the cross-functional team does not. the matrix model is a more permanent arrangement, whereas the cross-functional team is a temporary arrangement.
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On January 1, 2021, the Moody Company entered into a transaction for 100% of the outstanding common stock of Osorio Company. To acquire these shares, Moody issued $400 in long-term liabilities and also issued 40 shares of common stock having a par value of $1 per share but a fair value of $10 per share. Moody paid $20 to lawyers, accountants, and brokers for assistance in bringing about this acquisition. Another $15 was paid in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows: Moody Osorio Cash $180 $40 Receivables 810 180 Inventories 1,080 280 Land 600 360 Buildings (net) 1,260 440 Equipment (net) 480 100 Accounts payable (450) (80) Long-term liabilities (1,290) (400) Common stock ($1 par) (330) Common stock ($20 par) (240) Additional paid-in capital (1,080) (340) Retained earnings (1,260) (340) Note: Parentheses indicate a credit balance. In Moody's appraisal of Osorio, three assets were deemed to be undervalued on the subsidiary's books: Inventory by $10, Land by $40, and Buildings by $60. Compute the amount of consolidated inventories at date of acquisition.A. $1,080.B. $1,420.C. $1,065.D. $1,425.E. $1,440.
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Presented below are a number of balance sheet accounts of Deep Blue Something, Inc. A. Debt Investments.B. Treasury Stock.C. Common Stock.D. Dividends Payable.E. Accumulated DepreciationEquipment.F. Construction in Process.G. Petty Cash.H. Interest Payable.I. Deficit.J. Equity Investments (ownership stake of less than 20%).K. Income Taxes Payable.L. Unearned Subscriptions Revenue.M. Work in Process.N. Salaries and Wages Payable.Instructions:For each of the accounts above, indicate the proper balance sheet classification. In the case of borderline items, indicate the additional information that would be required to determine the proper classification.
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The value of Terrah's personal residence has declined significantly because of a recent forest fire in the area where she lives. The fire was a Federally declared disaster. Terrah's house suffered no actual damage during the fire, but because much of the surrounding area was destroyed, the value of all of the homes in the area declined substantially.Can Terrah take a casualty loss for the decline in value of her residence caused by the fire?__ because the decline in value of her residence ___ meet the "sudden, unexpected, and unusual, progressive deterioration" requirement for a casualty loss
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This information relates to Sunland Co.. 1. On April 5, purchased merchandise from Blossom Company for $26,400, terms 4/10, n/30. 2. On April 6, paid freight costs of $590 on merchandise purchased from Blossom Company. 3. On April 7, purchased equipment on account for $33,900. 4. On April 8, returned $5,200 of April 5 merchandise to Blossom Company. 5. On April 15, paid the amount due to Blossom Company in full. (a) Prepare the journal entries to record the transactions listed above on Sunland Co.s books. Sunland Co. uses a perpetual inventory system. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) No. Date Account Titles and Explanation Debit Credit 1. choose a transaction date enter an account title enter a debit amount enter a credit amount.
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The research and development (R&D) team of DataCom Corp., a software firm, holds a meeting to discuss potential ideas for new products. In the meeting, the moderator encourages everyone to share their ideas, no matter how trivial they may seem. He warns members against criticizing any idea and asks them to focus on offering plenty of ideas. In this scenario, the R&D team of DataCom is engaged in _____.a. concept testingb. idea screeningc. brainstormingd. beta testing
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A (Static) Using T accounts to record all business transactions. LO 3-1, 3-2, 3-4The following accounts and transactions are for Vincent Sutton, Landscape Consultant.Transactions:Sutton invested $90,000 in cash to start the business.Paid $6,000 for the current months rent.Bought office furniture for $10,580 in cash.Performed services for $8,200 in cash.Paid $1,250 for the monthly telephone bill.Performed services for $14,000 on credit.Purchased a computer and copier for $18,000; paid $7,200 in cash immediately with the balance due in 30 days.Received $7,000 from credit clients.Paid $2,800 in cash for office cleaning services for the month.Purchased additional office chairs for $5,800; received credit terms of 30 days.Purchased office equipment for $22,000 and paid half of this amount in cash immediately; the balance is due in 30 days.Issued a check for $9,400 to pay salaries.Performed services for $14,500 in cash.Performed services for $16,000 on credit.Collected $8,000 on accounts receivable from charge customers.Issued a check for $2,900 in partial payment of the amount owed for office chairs.Paid $725 to a duplicating company for photocopy work performed during the month.Paid $1,280 for the monthly electric bill.Sutton withdrew $5,500 in cash for personal expenses.Post the above transactions into the appropriate T accounts.Analyze:What liabilities does the business have after all transactions have been recorded?Complete this question by entering your answers in the tabs below.TransactionsAnalyzePost the above transactions into the appropriate T accounts.Cash Accounts ReceivableBal. Bal. Office Furniture Office EquipmentBal. Bal. Accounts Payable Vincent Sutton, CapitalBal. Bal. Vincent Sutton, Drawing Fees IncomeBal. Bal. Rent Expense Utilities ExpenseBal. Bal. Salaries Expense Telephone ExpenseBal. Bal. Miscellaneous Expense Bal. Complete this question by entering your answers in the tabs below.What liabilities does the business have after all transactions have been recorded?Liabilities
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Dixon Company is a manufacturer that completed numerous transactions during the month, some of which are shown below:A. Raw materials purchased on account, $100,000.B. Raw materials used in production, $78,000 direct materials, and $16,000 indirect materials.C. Sales commissions paid in cash, $45,000.D. Depreciation was recorded for the month, $60,000 (65% related to factory equipment, and the remainder related to selling and administrative equipment).E. Sales for the month, $450,000 (70% cash sales and the remainder were sales on account).F. Factory utilities paid in cash, $12,000.G. Applied $138,000 of manufacturing overhead to production during the month.H. Various jobs costing a total of $190,000 were completed during the month and transferred to Finished Goods.I. Cash receipts from customers who had previously purchased on credit, $115,000.J. Various completed jobs costing a total of $220,000 were sold to customers.K. Cash paid to raw material suppliers, $90,000.Required: The table shown below includes only one account from Dixon Company's balance sheet-Retained Earnings. For each of the above transactions, select "No" if it would not affect Retained Earnings. Conversely if the transaction would affect Retained Earnings, then record the amount of the increase or (decrease) to this account under the "Yes" column. Retained EarningsTransaction Yes Noabcdefghijk
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Sadie Equestrian Services established a petty cash fund in the amount of $500 on June 1, 2013. On June 30, a review of the petty cash vouchers showed disbursements for the following: Stamps $60 Cab Fare for Ms. Sadie to attend meeting downtown $28 Dinner for employees working overtime $185 Messenger Costs for delivering legal documents $54 Advance to salesperson for attending networking event $25 Purchase of emergency office supplies $69. The Petty cash fund had a remaining cash balance of $77. The proprietor, Ms. Sadie also decided to increase the size of the Petty Cash fund to $700. Journalize the following: a) Transaction to establish Petty Cash Fund b) Transaction to replenish Petty Cash Fund on June 30 c) Transaction to increase the size of the Petty Cash Fund
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Your supervisor has come to you with the following list of expenditures for the year and is asking you whether they should be capitalized or expensed as repairs and maintenance. Indicate all of the expenditures that would most appropriately be capitalized.1. Re-painted the office building. 2. Added a new wing onto the office building. 3. Took their fleet of cars in for servicing (changing the oil, etc.). 4. Added newer electronic locks on the doors in the production building. 5. Had an engine rebuilt in one of their fleet cars.
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For each of the following transactions that occur in their lives, identify whether it is included in the calculation of U.S. GDP as part of consumption (C), investment (I), government purchases (G), exports (X), or imports (M). Check all that apply.Transaction C |I |G| X |M|The Federal Aviation Administration expands the runways at Philadelphia International Airport, which is just a few miles from Antonio and Caroline's house.Dmitri buys a new set of tools to use in his plumbing business.Caroline buys a new BMW, which was assembled in Germany.Antonio's employer assigns him to provide consulting services to an Australian firm that's opening a manufacturing facility in China.Caroline gets a haircut.
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Nature's Garden Inc. produces wood chips, wood pulp, and mulch. These products are produced through harvesting trees and sending the logs through a wood chipper machine. One batch of logs produces 20,304 cubic yards of wood chips, 14,100 cubic yards of mulch, and 9,024 cubic yards of wood pulp. The joint production process costs a total of $32,000 per batch. After the split-off point, wood chips are immediately sold for $25 per cubic yard while wood pulp and mulch are processed further. The market value of the wood pulp and mulch at the split-off point is estimated to be $22 and $24 per cubic yard, respectively. The additional production process of the wood pulp costs $5 per cubic yard, after which it is sold for $30 per cubic yard. The additional production process of the mulch costs $4 per cubic yard, after which it is sold for $32 per cubic yard.Allocate the joint costs of production to each product using the net realizable value method.Joint Product AllocationWood chips $Wood pulp Mulch Totals $
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Solar Innovations Corporation bought a machine at the beginning of the year at a cost of $42,000. The estimated useful life was five years and the residual value was $5,000. Assume that the estimated productive life of the machine is 20,000 units. Expected annual production was year 1, 4,500 units; year 2, 5,500 units; year 3, 4,500 units; year 4, 4,500 units; and year 5, 1,000 units. Required: Complete a depreciation schedule for each of the alternative methods. a. Straight-line. b. Units-of-production. c. Double-declining-balance. Which method will result in the highest net income in year 2
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Listed below are selected transactions of Blossom Department Store for the current year ending December 31. 1. On December 5, the store received $490 from the Selig Players as a deposit to be returned after certain furniture to be used in stage production was returned on January 15. 2. During December, cash sales totaled $821,100, which includes the 5% sales tax that must be remitted to the state by the fifteenth day of the following month. 3. On December 10, the store purchased for cash three delivery trucks for $110,300. The trucks were purchased in a state that applies a 5% sales tax. 4. The store determined it will cost $96,300 to restore the area (considered a land improvement) surrounding one of its store parking lots, when the store is closed in 2 years. Blossom estimates the fair value of the obligation at December 31 is $77,400.
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The value of a share of common stock depends on the cash flows it is expected to provide, and those flows consist of the dividends the investor receives each year while holding the stock and the price the investor receives when the stock is sold. The final price includes the original price paid plus an expected capital gain. The actions of the marginal investor determine the equilibrium stock price. Market equilibrium occurs when the stock's price is -Select-less thanequal togreater thanCorrect 1 of Item 1 its intrinsic value. If the stock market is reasonably efficient, differences between the stock price and intrinsic value should not be very large and they should not persist for very long. When investing in common stocks, an investor's goal is to purchase stocks that are undervalued (the price is -Select-abovebelowequivalent toCorrect 2 of Item 1 the stock's intrinsic value) and avoid stocks that are overvalued.The value of a stock today can be calculated as the present value of -Select-a finitean infiniteCorrect 3 of Item 1 stream of dividends:This is the generalized stock valuation model. We will now look at 3 different situations where we can adapt this generalized model to each of these situations to determine a stock's intrinsic value:1. Constant Growth Stocks;2. Zero Growth Stocks;3. Nonconstant Growth Stocks.Constant Growth Stocks:For many companies it is reasonable to predict that dividends will grow at a constant rate, so we can rewrite the generalized model as follows:This is known as the constant growth model or Gordon model, named after Myron J. Gordon who developed and popularized it. There are several conditions that must exist before this equation can be used. First, the required rate of return, rs, must be greater than the long-run growth rate, g. Second, the constant growth model is not appropriate unless a company's growth rate is expected to remain constant in the future. This condition almost never holds for -Select-maturestart-upCorrect 4 of Item 1 firms, but it does exist for many -Select-maturestart-upCorrect 5 of Item 1 companies.Which of the following assumptions would cause the constant growth stock valuation model to be invalid?The growth rate is zero.The growth rate is negative.The required rate of return is greater than the growth rate.The required rate of return is more than 50%.None of the above assumptions would invalidate the model.-Select-Statement aStatement bStatement cStatement dStatement eCorrect 6 of Item 1Quantitative Problem 1: Hubbard Industries just paid a common dividend, D0, of $1.60. It expects to grow at a constant rate of 2% per year. If investors require a 10% return on equity, what is the current price of Hubbard's common stock? Round your answer to the nearest cent. Do not round intermediate calculations.$ per shareZero Growth Stocks:The constant growth model is sufficiently general to handle the case of a zero growth stock, where the dividend is expected to remain constant over time. In this situation, the equation is:Note that this is the same equation developed in Chapter 5 to value a perpetuity, and it is the same equation used to value a perpetual preferred stock that entitles its owners to regular, fixed dividend payments in perpetuity. The valuation equation is simply the current dividend divided by the required rate of return.Quantitative Problem 2: Carlysle Corporation has perpetual preferred stock outstanding that pays a constant annual dividend of $2.00 at the end of each year. If investors require an 10% return on the preferred stock, what is the price of the firm's perpetual preferred stock? Round your answer to the nearest cent. Do not round intermediate calculations.$ per shareNonconstant Growth Stocks:For many companies, it is not appropriate to assume that dividends will grow at a constant rate. Most firms go through life cycles where they experience different growth rates during different parts of the cycle. For valuing these firms, the generalized valuation and the constant growth equations are combined to arrive at the nonconstant growth valuation equation:Basically, this equation calculates the present value of dividends received during the nonconstant growth period and the present value of the stock's horizon value, which is the value at the horizon date of all dividends expected thereafter.Quantitative Problem 3: Assume today is December 31, 2013. Imagine Works Inc. just paid a dividend of $1.15 per share at the end of 2013. The dividend is expected to grow at 15% per year for 3 years, after which time it is expected to grow at a constant rate of 6% annually. The company's cost of equity (rs) is 9.5%. Using the dividend growth model (allowing for nonconstant growth), what should be the price of the company's stock today (December 31, 2013)? Round your answer to the nearest cent. Do not round intermediate calculations.$ per share
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The adjusted trial balance of Dawson Company contained the following information. Assume the tax rate is 33%: Debit Credit Sales revenue $425,000Sales returns and allowances $ 20,000Sales discounts 5,000Cost of goods sold 300,000Operating expenses 61,000Interest revenue 2,000Interest expense 1,000Compute the gross profit. rate(%)
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Play now? Play later?You can become a millionaire! That's what the junk mail said. But then there was the fine print:If you act before midnight tonight, then here are you chances: 0.1% that you receive $1,000,000;75% that you get nothing, otherwise you must PAY $5000.But wait, there's more! If you don't win the million AND you don't have to pay on your first attempt thenyou can choose to play one more time.If you do, then we 20X your probability of winning big - yes, you will hava a 2% chance ofreceiving $100,000 and 60% chance of winning $7500, but must pay $10,000 otherwise.What is your expected outcome for attempting this venture? Solve this problem usinga decision tree and clearly show all calculations and the expected value at each node.Answer these questions:1) should you play at all? (5%) And if so, what is my expected (net) monitary value? (10%)2) If you play and don't win at all on the first try (but don't lose money), should you try again? (5%) Why? (5%)3) clearly show the decision tree (40%) and expected net monitary value at each node (25%)
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Oriole Products manufactures two component parts: AJ40 and AJ60. AJ40 components are being introduced currently, and AJ60 parts have been in production for several years. For the upcoming period, 1,500 units of each product are planned for manufacturing. Assume that the only relevant overhead cost is for engineering change orders (any requested changes in product design or the manufacturing process). AJ40 components are expected to require 4 change orders and AJ60 only 2. Each AJ40 requires 1 machine hour, and each AJ60 requires 1.5 machine hours. The cost of a change order is $420.Required:Estimate the cost of engineering change orders for AJ40 and AJ60 components if Blue uses a traditional costing method and machine hours as the allocation base.
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Read the rejection follow-up letter, and answer the following question. Dear Ms. Gonzalez: Although I am disappointed to hear that you have selected another candidate for the marketing position, I appreciate your prompt and courteous communication. Because I believe I have the organizational and technical skills needed to work in a growing company like EdCo, I hope you will keep my rsum in your active file. My desire to work for your company remains strong. I enjoyed meeting with you, and I appreciate your thorough explanation of your company's growth and future goals. To enhance my qualifications, I have enrolled in a course on Intercultural Communication in the Workplace at ZSU. If you have an opening for a position I am qualified for, please contact me at (345) 435-3532. I will contact you in the next month to discuss employment possibilities. Sincerely, Janet Havasu What is effective about the letter? It uses memo format. It asks specific questions about the position. It refers to specifics in the applicant's interview. When writing a letter turning down a job offer, what guideline should you follow? Include specific reasons why you didn't like the job. Compose your message on personal stationery. Express gratitude and best wishes for the future.
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For each of the following pairs of goods, state whether the cross-price elasticity is likely positive, negative, or zero. Explain your answers.a. Hulu and Netflix.Close to zero. While they are substitutes they are not close substitutes.Negative. They are complements.Positive. They are close substitutes.b. Tortilla chips and salsa.Close to zero. While they are substitutes they are not close substitutes.Negative. They are complements.Positive. They are close substitutes.c. Movie and popcorn.Positive. They are close substitutes.Close to zero. While they are substitutes they are not close substitutes.Negative. They are complements.d. Running shoes and high heels.Negative. They are complements.Positive. They are close substitutes.Close to zero. While they are substitutes they are not close substitutes.
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Suppose you are the agent for a baseball pitcher. Suppose he is offered the following contract by the New York Yankees: a signing bonus of $3,000,000 (to be received immediately), a first years salary of $6,000,000 (to be received one year from today), a second years salary of $7,000,000 (to be received two years from today), and a third years salary of $8,000,000 (to be received three years from today). Suppose he is offered the following contracts by the San Francisco Giants: a signing bonus of $6,000,000, a first years salary of $5,500,000, a second years salary of $6,000,000, and a third years salary of $6,000,000. If you believe the interest rate is 10%, which offer would you advise the pitcher to accept? Would your advice change if you believed the interest rate were 5%?
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