The answer to the following questions are:
a) There would be no disadvantage to Arthur in selling some of his shares to Tony's daughter, Chloe. Since Chloe is not currently part of the company, Arthur will not lose any control or voting rights over the company.
b) The provision that Tony should be a director of Limpopo Ltd for life, as stated in the Articles of Association, would not be enforceable because it contradicts the Companies Act 2006, which requires directors to be re-elected after a specific period of time. Hence, Tony can only hold the position for the length of his reappointment period.
c) Limpopo Ltd would be guilty of a crime as per the Employers' Liability (Compulsory Insurance) Act 1969, if an employee was injured at work due to Arthur's failure to renew the company insurance policy. The employee who was injured at work could claim compensation from Limpopo Ltd, as they would be liable for the injuries.
d) Tony may claim compensation from Limpopo Ltd as the director responsible for health and safety. However, before making such a claim, he must first examine whether he has followed the company's safety protocols, as he may be liable if he failed to do so.
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Regression is a technique that is typically used in top-down estimation True False
False. Regression is a statistical technique used in data analysis to establish relationships and make predictions based on observed data. It is not specifically tied to top-down estimation.
Regression analysis is a versatile tool used in various fields, such as economics, finance, social sciences, and marketing, to analyze data, identify patterns, and make predictions. It involves estimating the parameters of the regression model, assessing the model's goodness of fit, and interpreting the results to draw meaningful conclusions.
In top-down estimation, the focus is on dividing the project or budget into logical and manageable components. This can be done based on various factors such as work breakdown structure, historical data, expert judgment, or predefined ratios. Each component or subtask is then assigned a portion of the overall estimate, typically based on its relative size or importance.
regression analysis can provide valuable insights in top-down estimation by identifying variables or factors that have a significant impact on the outcome being estimated. For example, regression analysis can help determine the relationship between certain project characteristics or variables and project cost or duration. This information can then be used to inform the allocation of estimates in the top-down estimation process.
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Joy Bakery has been producing cinnamon rolls for more than 10 years. The owner, Mary, wants to better understand its productivity. The Bakery produces 1,200 rolls per week and hires three bakers, each working 8 hours per day and 5 days per week (payroll cost is $3,000/week). The baking material costs $1,500 per week. The miscellaneous expenses are $200 per week.
Determine
(1) labor productivity
(2) multifactor productivity.
1. Labor productivity: 10 cinnamon rolls per labor hour.
2. Multifactor productivity: 0.2553 cinnamon rolls per dollar of input.
1. Labor productivity is a measure of the efficiency of labor utilization. In this case, the bakery produces 1,200 rolls per week with 3 bakers working 8 hours per day and 5 days per week. By dividing the number of rolls produced (1,200) by the total labor hours worked (120), we find that the labor productivity is 10 cinnamon rolls per labor hour.
2. Multifactor productivity measures the efficiency of multiple inputs in the production process. In addition to labor, it takes into account other factors such as material costs and miscellaneous expenses. The total inputs in this case include the labor cost ($3,000), material cost ($1,500), and miscellaneous expenses ($200), resulting in a total of $4,700. By dividing the number of rolls produced (1,200) by the total inputs ($4,700), we find that the multifactor productivity is approximately 0.2553 cinnamon rolls per dollar of input.
These productivity measures provide insights into the efficiency and effectiveness of the bakery's production process. By evaluating labor productivity and multifactor productivity, the owner, Mary, can assess the bakery's performance, identify areas for improvement, and make informed decisions to enhance productivity and profitability.
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earn an average of $147 per day. After recording any necessary adjustment, in its December 31,2021 , balance sheet, what amount of liability for compensated absences is M required to report? Multiple Choice $29,400 $0. $220,500 $441,000
The amount of liability for compensated absences that M is required to report in its December 31, 2021, balance sheet is $220,500.
This liability is calculated by multiplying the average daily wage of $147 by the number of days in the year, which is 365. Therefore, $147 * 365 = $53,655 is the total liability. However, M is required to report only the portion that will be paid within the following year. Assuming that compensated absences are typically paid within one year, the liability to be reported is $53,655 / 365 * 10 = $7,350. This amount represents the liability for compensated absences to be settled in the next year, hence the correct answer is $220,500.
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Question 5
Zycron Ltd. Is a computer games manufacturer. It currently has Zycron Ltd. Is a computer games manufacturer. It currently has Pokermatch. Data regarding the two products are as follows:
Alien predators vegas pokematch
Selling price $89 $59
Variable manufacturing costs 18 12
Variable marketing costs 27 16
The fixed costs of Zycron are $18,750,000, and the current sales mix is 40% Alien Predators and 60% Vegas Pokermatch.
Required:
1. Assuming no change in sales mix, costs, or revenues, what is the breakeven point in total units? How many units of Alien Predators and how many units of Vegas Pokermatch are sold at the breakeven point?
2. Assume the following sales mix: 20\% Alien Predators and 80% Vegas Pokermatch. Calculate the breakeven point under this sales mix assumption.
3. For the two possible sales mixes (in requirements 1 and 2), determine operating income if total unit sales are 750,000 .
The breakeven point in total units is 1,875,000 units. At the breakeven point, 750,000 units of Alien Predators and 1,125,000 units of Vegas Pokermatch are sold.
To calculate the breakeven point, we need to determine the total number of units that need to be sold in order to cover the fixed costs. The breakeven point occurs when the total revenue equals the total costs.
In this case, the fixed costs are given as $18,750,000. The variable manufacturing costs per unit for Alien Predators are $18, and for Vegas Pokermatch are $12. The variable marketing costs per unit for Alien Predators are $27, and for Vegas Pokermatch are $16.
The selling price for Alien Predators is $89, and for Vegas Pokermatch is $59. The sales mix is 40% Alien Predators and 60% Vegas Pokermatch.
To find the breakeven point, we need to calculate the contribution margin per unit, which is the selling price minus the variable costs. For Alien Predators, the contribution margin per unit is $89 - ($18 + $27) = $44. For Vegas Pokermatch, the contribution margin per unit is $59 - ($12 + $16) = $31.
Next, we divide the fixed costs by the weighted average contribution margin per unit to find the breakeven point in total units. The weighted average contribution margin per unit is calculated as (40% * $44) + (60% * $31) = $38.40. Therefore, the breakeven point in total units is $18,750,000 / $38.40 = 1,875,000 units.
At the breakeven point, with a sales mix of 40% Alien Predators and 60% Vegas Pokermatch, 40% of 1,875,000 units are Alien Predators, which is 750,000 units, and 60% of 1,875,000 units are Vegas Pokermatch, which is 1,125,000 units.
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Incentives for earnings management are inherent in the management structure but are least likely to originate from:
Select one:
a. market expectations.
b. positive cash flows.
c. situations including financial distress.
d. executive remunerations.
Incentives for earnings management are least likely to originate from market expectations. The other options—positive cash flows, situations including financial distress, and executive remunerations—have a greater potential to create incentives for earnings management.
Earnings management refers to the manipulation of financial statements by management to portray a desired financial performance. While incentives for earnings management can arise from various factors, market expectations are least likely to be the origin of such incentives.
Market expectations represent the collective assessment and forecasts of investors and analysts regarding a company's future performance. These expectations are influenced by a company's historical financial results, industry trends, and overall market conditions. Manipulating earnings to meet or exceed market expectations is generally more difficult and riskier compared to other incentives.
On the other hand, positive cash flows can create an incentive for earnings management as management may seek to enhance reported profits to signal financial strength. In situations including financial distress, management may manipulate earnings to avoid breaching loan covenants or to improve the company's financial position. Executive remunerations, such as performance-based bonuses tied to reported earnings, can also incentivize earnings management.
While market expectations indirectly influence the overall business environment and may influence management decisions, they are not typically the direct origin of incentives for earnings management.
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The marketice dirsctar is considerine the posibinty of exploring new markets in Aala to boost profits and inpereve conh flow. is thit a good option for the company? Yes, because when a company has domertic sales that are declining. it chosid automatically diversify into new international markets No, because the investment and uncertainty imvolved in operiing new tharkets is not usually a good fit for a compary with declining sales and cash thow difficulties No, because international markets will ahways have more competitors than domestic market
The market director's decision of exploring new markets in Asia is not a good option for a company with declining sales and cash flow difficulties. The investment and uncertainty involved in operating new markets are not usually a good fit for such companies.
Though it is true that diversifying into new international markets can boost profits and improve cash flow, it requires significant investment and resources to operate in a foreign country. International markets have more competitors than domestic markets, and the company may face stiff competition in the foreign market
.Entering new markets requires a lot of resources, including financial, human, and marketing resources. Companies that have declining sales and cash flow difficulties may not have sufficient resources to invest in new markets. Instead, they should focus on improving their sales in the domestic market by launching new products, improving product quality, and optimizing marketing strategies.
In conclusion, exploring new markets in Asia may not be a good option for the company with declining sales and cash flow difficulties because it requires significant investment and resources to operate in a foreign country. It is essential to focus on improving sales in the domestic market by launching new products, improving product quality, and optimizing marketing strategies.
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Zamzama Corp. reports the following on its balance sheets:
December 31, 2022 December 31, 2021
Property and equipment, at cost $251,000 $147,000
Common stock 797,000 604,000
During 2022, Zamzama exchanged common stock for equipment worth $46,000. The remainder of the increase in property and equipment resulted from Zamzama buying equipment for cash. The remainder of the increase in common stock resulted from Zamzama issuing common stock for cash.
On its 2022 statement of cash flows, Zamzama will report net cash flows from investing activities of:
[Enter a net cash inflow as a positive number or a net cash outflow as a negative number.]
PLEASE PROVIDE THE SUPPORTING CALCULATIONS. tHANK YOU
Net cash flows from investing activities for Zamzama Corp. in 2022:
Net cash inflow: $46,000 The net cash flows from investing activities for Zamzama Corp. in 2022 is a positive $46,000, indicating a net cash inflow resulting from the purchase of equipment for cash.
To calculate the net cash flows from investing activities, we need to consider the changes in property and equipment during the year. According to the information provided, the increase in property and equipment from December 31, 2021, to December 31, 2022, is $104,000 ($251,000 - $147,000). From this increase, $46,000 is attributed to the exchange of common stock for equipment, indicating a non-cash transaction. The remaining increase in property and equipment, which is not accounted for by the exchange, represents the purchase of equipment for cash. Since the question asks for net cash flows from investing activities, we consider only the cash component of the increase in property and equipment.
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Lakeside inc. produces a product that currently sells for $44 per unit. Current production costs per unit include direct materials, $12 direct labor, \$14: variable overhead, \$7: and fixed overhead. \$7. Product engineening has determined that certain production changes could refine the product quality and functionalify. These new production changes would increase matertal and labor costs by 20% per unit. Requlred: a. What would be the incremental profit or loss if Lakeside could sell the refined version of its product for $49 per unit? (Round your final answer to 2 decimal places, Loss amounts should be Indicated with a minus sign.) b. Should it be processed further? Yes No
(a) The incremental profit or loss if Lakeside could sell the refined version of its product for $49 per unit will be $3.80 profit per unit.
(b) Whether it should be further processed or not would depend on the cost of processing it. If the cost of processing it further is more than the incremental profit of $3.80 per unit, then it would not be worth processing it
a) To find the incremental profit or loss, we first need to calculate the cost of the product per unit.
Direct Materials = $12
Direct Labor = $14
Variable Overhead = $7
Fixed Overhead = $7
Total Cost = $40 per unit
Then, the new cost after the production changes will be:
Direct Materials = $12 + 20% = $14.40
Direct Labor = $14 + 20% = $16.80
Variable Overhead = $7
Total Cost = $40 + $2.40 + $2.80 = $45.20 per unit.
The incremental profit or loss would be:$49 – $45.20 = $3.80 profit per unit.
b) Whether it should be further processed or not would depend on the cost of processing it. If the cost of processing it further is more than the incremental profit of $3.80 per unit, then it would not be worth processing it further. If the cost of processing it further is less than the incremental profit of $3.80 per unit, then it would be worth processing it further.
Hence, further information regarding the additional costs associated with processing it further is needed to make a decision.
Therefore, the incremental profit or loss if Lakeside could sell the refined version of its product for $49 per unit will be $3.80 profit per unit and whether it should be further processed or not would depend on the cost of processing it.
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Kendall Corners Inc. recently reported net income of $2.7 million and depreciation of $600,000. What was its net cash flow? Assume it had no amortization expense. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round you answer to the nearest dollar.
Kendall Corners Inc.'s net cash flow is $3,300,000. This represents the total amount of cash generated by the company during the period, taking into account both the net income and the depreciation expense.
To calculate the net cash flow for Kendall Corners Inc., we need to consider the net income and depreciation. Net cash flow represents the cash generated or used by a company during a specific period.
It takes into account the company's operating activities and non-operating activities, such as depreciation. In this case, the net income is $2.7 million, and the depreciation is $600,000.
Explanation:
Net cash flow is calculated by adjusting net income for non-cash expenses, such as depreciation. Depreciation is a non-cash expense that represents the allocation of the cost of an asset over its useful life. Since depreciation does not involve an outflow of cash, it needs to be added back to the net income to calculate the net cash flow.
Net Cash Flow = Net Income + Depreciation
Substituting the given values:
Net Cash Flow = $2.7 million + $600,000
Calculating the net cash flow:
Net Cash Flow = $3.3 million
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WRITE IN YOUR OWN WORD. NO PLAGIARISM
PLEASE.
Part 1 Create a team agreement that outlines the team operating rules
for the construction project you are managing. What is the impact on a project
Part 1: Creating a team agreement that outlines the team operating rules for a construction project is crucial for ensuring effective collaboration and project success. The impact of having a well-defined team agreement can be significant on multiple aspects of the project:
1. Clear Communication: The team agreement establishes guidelines for communication within the team, including modes of communication, frequency of meetings, and expectations for timely responses. This promotes efficient information sharing, reduces misunderstandings, and fosters better collaboration among team members.
2. Roles and Responsibilities: The team agreement defines the roles and responsibilities of each team member, outlining their specific tasks and deliverables. This clarity helps prevent confusion or overlapping of responsibilities, ensuring that everyone understands their assigned tasks and can work towards achieving project objectives.
3. Workflow and Processes: The team agreement outlines the workflow and processes to be followed throughout the project, including approval procedures, document management, and change request processes. Having standardized processes in place streamlines project execution, minimizes errors, and improves overall project efficiency.
4. Conflict Resolution: The team agreement addresses how conflicts and disagreements will be resolved within the team. By establishing a framework for addressing conflicts in a constructive manner, it promotes a positive team environment and helps maintain project momentum.
5. Accountability and Performance: The team agreement sets expectations for individual and team performance, including deadlines, quality standards, and project milestones. This promotes accountability among team members, ensuring that everyone is committed to meeting project targets and delivering high-quality results.
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The uses of derivatives include: I) Financial engineering for companies; II) Hedging for investors; III) Speculation for traders
a. II only
b. III only
c. I and II only
d. I, II, and III
Participants in derivatives markets include: I) Hedgers; II) Speculators; III) Arbitrageurs
a. II only
b. I, II, and III
c. I only
d. I and III only
An Arbitrage opportunity implies that:
a. Investor will make risky profits with chance of losses
b. Investor will incur losses with certainty
c. Investor will make risk-free profits ("free lunch")
d. Investor will not receive any profits or losses
The uses of derivatives include: I) Financial engineering for companies; II) Hedging for investors; III) Speculation for traders. The correct option is d. I, II, and III. Financial engineering for companies:Financial engineering is the use of derivative securities to solve financial problems.
It is a way of optimizing financial decision making by designing creative solutions for problems that cannot be solved through traditional methods. Companies often use financial engineering to improve their financial performance, manage their risks, and optimize their capital structure.Hedging for investors:Hedging is a method used to mitigate financial risk. Hedging involves the use of a financial instrument or investment position to offset a potential loss in another investment position. Investors use hedging to protect themselves from potential losses.Speculation for traders:Speculation involves taking positions in derivatives markets with the goal of profiting from price movements.
Traders use derivatives to speculate on the future movements of stock prices, interest rates, and other market variables. The correct option is d. I, II, and III.Participants in derivatives markets include: I) Hedgers; II) Speculators; III) Arbitrageurs. The correct option is b. I, II, and III.
Hedgers: Hedgers participate in the derivatives markets to reduce their exposure to risk. Hedgers use derivatives to hedge against price changes in the underlying assets they own or will own in the future. They use derivatives to lock in a price for a future transaction.Speculators: Speculators participate in the derivatives markets to make a profit from price changes in the underlying assets. Speculators use derivatives to take advantage of price movements in the underlying assets. They use derivatives to amplify the returns on their investments.Arbitrageurs: Arbitrageurs participate in the derivatives markets to take advantage of price discrepancies between related assets.
They use derivatives to buy and sell related assets simultaneously, taking advantage of the price difference to make a profit. The correct option is b. I, II, and III.An arbitrage opportunity implies that: Investor will make risk-free profits ("free lunch").The correct option is c. Investor will make risk-free profits ("free lunch").Arbitrage is the process of buying and selling assets simultaneously to take advantage of price discrepancies between related assets. An arbitrage opportunity implies that an investor can make risk-free profits by buying and selling related assets simultaneously, taking advantage of the price difference to make a profit.
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Which of the following is TRUE regarding the Arctic? Shipping routes may soon be closed year-round due to global warming The Middle Powers have been effective in reducing tensions between the U.S. and Russia there O China and India have no interest in the region since their countries do not border it O Diplomatic tactics used in the region could set off tensions in other parts of the world
Shipping routes may soon be closed year-round due to global warming in the Arctic.
The statement that shipping routes may soon be closed year-round due to global warming in the Arctic is true. With the ongoing melting of sea ice in the Arctic region, there has been an increase in accessibility to these previously ice-covered areas, opening up the possibility of utilizing shipping routes for commercial purposes.
However, this accessibility is also accompanied by the risk of environmental challenges and safety concerns.
As global warming continues to cause the Arctic ice to melt at an accelerated rate, there is a growing concern that the Arctic shipping routes may become navigable throughout the year, leading to increased maritime activities in the region.
The opening of year-round shipping routes in the Arctic can have significant implications for global trade and transportation. It offers shorter routes between Asia, Europe, and North America, potentially reducing shipping distances and transit times.
However, it also presents challenges related to infrastructure development, environmental protection, and international cooperation in the Arctic region.
The changing dynamics in the Arctic have prompted discussions among nations with interests in the region, including Arctic states and non-Arctic states, about the governance and regulation of activities in the Arctic.
Overall, the potential year-round closure of shipping routes due to global warming in the Arctic highlights the need for careful consideration of environmental and geopolitical implications in this rapidly changing region.
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Bilbo Baggins owns a segregated fund. Based on the following information, what is the net asset value per share of a segregated fund as of December 6th? • Fair market value of the fund on December 6th : $30,000,000 • Liabilities on December 6th: $500,000 • Contributions on December 6th: $200,000 • Withdrawals on December 6th: $30,000 • Number of shares outstanding on December 6th: 2,000,000 Question 1 options: a.$15. 37 b. $15.00 c. $14.84 d. $14.75
Question 2 (1 point) : Frank, 60, and Lisa, 55, have been married for 30 years..Frank worked as a firefighter for most of his career. His annual salary started at $40,000 but gradually increased to $90,000. He quit the force five years ago for a less backbreaking career in the financial industry. At that time, he transferred the money from his defined contribution pension plan into a locked-in RRSP (LRSP/LIRA). For the past two years he has earned roughly $50,000 selling mutual funds. Lisa has been diagnosed with a terminal illness. She has always worked as an early childhood educator and earned $35,000 in her final year of employment. Frank has transferred the funds from his Locked-in-RRSP to a LIF so he can start drawing an income from it. Frank is purchasing a life annuity within his LIF. What type of annuity should he select? Question 2 options: Single life annuity with 10 year guaranteed term Joint life annuity with 50% continuance Joint life annuity with 60% continuance after the first death Joint life annuity with 100% continuance after the first death
Question 3 (1 point) Jerry Seinfeld was a member of an employer DCPP plan, but leaves the plan before he is eligible to receive any retirement benefits. Jerry has a shortened life expectancy. Which of the following statements best describes the treatment of Jerry’s pension benefit in this case? Question 3 options: Jerry’s qualifying factor is reduced according to his life expectancy Jerry does not have to pay taxes on the withdrawals from his plan Jerry can access the funds earlier than they would otherwise be available No change in the treatment of Jerry’s plan
Question 4 (1 point) Pongo, age 50, is seeking an investment product that will provide him with a stable income stream for the rest of his life. Furthermore, Pongo wants to make sure that, if he should die before his wife, Perdita, that she would also enjoy a stable stream of income for the rest of her life. Which of the following would be most appropriate for Pongo? Question 4 options: Spousal RRSP Joint annuity Joint RRSP Spousal annuity.
Question 5 (1 point) Toby Keith is a conservative investor who has historically invested in GICs. His advisor initially suggested mutual funds but Toby was not comfortable with the risk involved. Toby asked his advisor about segregated funds (IVICs) because he has heard they can involve guarantees. What is the maximum guarantee on segregated funds? Question 5 options: 100% upon the death of the plan holder and 125% upon maturity 75% upon the death of the plan holder and 100% upon maturity 125% upon the death of the plan holder and 125% upon maturity 100% upon the death of the plan holder and 100% upon maturity
Q1: The NAV per share= $14.75 (Option d). Q2: Joint life annuity with 100% continuance Q3: No change in treatment of Jerry's pension benefit Q4: Joint annuity for Pongo Q5: Max guarantee on segregated funds = 100% upon death and maturity
Question 1: The net asset value per share of the segregated fund as of December 6th is calculated by subtracting the liabilities, withdrawals, and dividing by the number of shares outstanding. The calculation is as follows: ($30,000,000 - $500,000 - $30,000) / 2,000,000 = $14.75. Therefore, the answer is option d. $14.75.
Question 2: Frank, who is purchasing a life annuity within his LIF, should select a Joint life annuity with 100% continuance after the first death. This option ensures that his wife, Lisa, will continue to receive a stable income stream for the rest of her life even after Frank's death.
Question 3: In Jerry Seinfeld's case, since he leaves the employer DCPP plan before being eligible to receive any retirement benefits and has a shortened life expectancy, there would be no change in the treatment of Jerry's plan. He would not be able to access the funds earlier than they would otherwise be available.
Question 4: The most appropriate option for Pongo, who wants to ensure a stable income stream for himself and his wife Perdita, would be a Joint annuity. This type of annuity would provide both Pongo and Perdita with a stable income for the rest of their lives, even if one of them were to pass away.
Question 5: The maximum guarantee on segregated funds is 100% upon the death of the plan holder and 100% upon maturity. This means that the plan holder's beneficiaries would receive 100% of the investment amount in case of death, and upon maturity, the plan holder would receive 100% of the investment amount.
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the last step in the financial planning process is to
The last step in the financial planning process is to implement the plan. Once a financial plan has been created, the next step is to put it into action.
This involves taking the specific steps outlined in the plan to achieve the financial goals that were identified. Implementation may involve opening new accounts, setting up automatic transfers or payments, adjusting spending habits, and making investment decisions.
It is important to regularly review and adjust the plan as needed to ensure that it remains relevant and effective in achieving the desired outcomes.
Implementing the financial plan is crucial for turning ideas and intentions into tangible results. It requires discipline, consistency, and regular monitoring of progress. By following through with the plan, individuals or organizations increase their chances of achieving financial success and realizing their long-term objectives.
It is important to remember that implementation is an ongoing process, and periodic reviews and adjustments may be necessary to ensure the plan remains relevant and effective.
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1.
Jan. 1
Cash. 17,500
Equipment 82,500
Note Payable 25,000
Moss, Capital 75,000
Record initial capital investment of Moss. Jan. 1
2.
Cash. 31,250
Barber, Capital 31,250
Record initial capital investment of Barber.
On January 1, Moss made an initial capital investment of $75,000 into the business, resulting in an increase in cash by $17,500 and equipment by $82,500.
At the same time, a note payable of $25,000 was recorded. On the other hand, Barber made an initial capital investment of $31,250 into the business, resulting in an increase in cash and capital accounts by the same amount.
The transactions described are related to the initial capital investments made by Moss and Barber into the business. In the first transaction, Moss invested $75,000, which increased the cash account by $17,500 and the equipment account by $82,500. This reflects the cash contribution made by Moss and the acquisition of equipment for the business. Additionally, a note payable of $25,000 was recorded, indicating that the business borrowed funds.
In the second transaction, Barber made an initial capital investment of $31,250. This resulted in an increase in the cash account by the same amount, representing the cash contribution made by Barber. The capital account of Barber also increased by $31,250, reflecting the ownership interest in the business.
These transactions reflect the infusion of capital by Moss and Barber into the business, which increases the company's assets and equity. The cash contributed by the owners and the borrowed funds are recorded as sources of financing for the business.
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The modern corporation
a. Is concerned about operating profitably above all objectives.
b. Needs to balance maximizing profits while adhering to ever-changing laws.
c. Should also be a good citizen.
d. All of the above.
The modern corporation should also be a good citizen. Option c is correct.
A modern corporation is an organization or group of people that have been granted the legal authority to act as a single entity, with certain privileges and immunities. Corporations exist in order to achieve specific objectives and goals, such as maximizing profits or providing goods and services to customers.
They are usually managed by a board of directors or other governing body that is responsible for making decisions about how the organization will operate. They are subject to various laws and regulations that govern their behavior and conduct in the marketplace
While a corporation's primary objective may be to operate profitably and maximize shareholder returns, it should also take into account its social and environmental impact.
This means that corporations should be responsible for their actions and strive to make a positive impact on society as a whole. In recent years, there has been a growing movement towards corporate social responsibility, which emphasizes the importance of businesses operating in an ethical and sustainable manner.
Therefore, c is correct.
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the job creation argument for protection against free trade:
The job creation argument for protection against free trade is based on the belief that implementing trade barriers, such as tariffs or import restrictions, can protect domestic industries and workers from foreign competition.
Proponents of this argument argue that by limiting imports and promoting domestic production, more jobs will be created or preserved within the protected industries.
Here are some key points and perspectives related to the job creation argument:
Protection of Domestic Industries: Advocates of protectionist measures argue that by imposing tariffs or quotas on imported goods, domestic industries will face less competition from foreign producers.
This reduced competition is believed to create a favorable environment for domestic businesses to expand their operations, increase production, and subsequently create more jobs.
Preserving Domestic Jobs: Supporters of protectionism argue that by shielding domestic industries from foreign competition, jobs that would otherwise be outsourced or lost to foreign countries can be preserved. They contend that without trade barriers, industries in developed countries may struggle to compete with lower-cost labor and production practices in developing nations, leading to job losses domestically.
National Security Concerns: Some proponents of protectionism argue that safeguarding domestic industries is vital for national security reasons. They contend that certain industries, such as defense or critical infrastructure sectors, need to be protected to maintain self-sufficiency and avoid dependence on foreign sources. They assert that a strong domestic industrial base is necessary to ensure a country's security and resilience.
Transition and Adjustment: Supporters of protectionism argue that it provides a temporary buffer for domestic industries to adjust and adapt to changing market conditions or global competition. They argue that by giving industries time to innovate, upgrade technology, and improve efficiency, they can become more competitive in the long run, leading to job growth.
Critics and Counterarguments: Critics of the job creation argument for protectionism contend that while trade barriers may protect certain industries and jobs, they can harm overall economic efficiency and consumer welfare. They argue that by limiting imports, protectionism can lead to higher prices for consumers, reduced product choices, and hindered international trade relationships, which can have negative consequences for economic growth and development.
It's important to note that the job creation argument for protectionism is a topic of debate among economists and policymakers. While some industries and workers may benefit from protectionist measures in the short term, the long-term effects and overall impact on the economy need to be carefully considered.
Many economists advocate for policies that focus on enhancing competitiveness, investing in education and training, and promoting innovation rather than relying solely on trade barriers to address employment challenges.
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Which of the following best describes the GAAP-required approach to handling interest incurred in financing the construction of property, plant, and equipment?
The GAAP-required approach to handling interest incurred in financing the construction of property, plant, and equipment is to capitalize the interest as part of the cost of the assets. This means that the interest expense is added to the cost of the assets under construction, increasing their overall value. Once the construction is completed, the capitalized interest is then depreciated along with the other costs of the assets.
According to generally accepted accounting principles (GAAP), interest incurred during the construction of property, plant, and equipment is considered a cost directly attributable to the acquisition or construction of those assets. Therefore, instead of expensing the interest as incurred, GAAP requires that the interest be capitalized.
Capitalizing interest means adding it to the cost of the assets under construction. By doing so, the interest expense is spread over the useful life of the assets. This approach aligns with the matching principle, which aims to match expenses with the revenues they help generate.
Once the construction is completed, the capitalized interest becomes part of the overall cost of the assets and is depreciated over their useful life. This treatment ensures that the interest expense is allocated over the period during which the assets generate economic benefits for the entity.
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The GAAP-required approach to handling interest incurred in financing the construction of property, plant, and equipment is to capitalize the interest as part of the cost of the assets. This means that the interest expense is added to the cost of the assets under construction, increasing their overall value. Once the construction is completed, the capitalized interest is then depreciated along with the other costs of the assets.
According to generally accepted accounting principles (GAAP), interest incurred during the construction of property, plant, and equipment is considered a cost directly attributable to the acquisition or construction of those assets. Therefore, instead of expensing the interest as incurred, GAAP requires that the interest be capitalized.
Capitalizing interest means adding it to the cost of the assets under construction. By doing so, the interest expense is spread over the useful life of the assets. This approach aligns with the matching principle, which aims to match expenses with the revenues they help generate.
Once the construction is completed, the capitalized interest becomes part of the overall cost of the assets and is depreciated over their useful life. This treatment ensures that the interest expense is allocated over the period during which the assets generate economic benefits for the entity.
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Labor data for making one gallon of finished product in Maria Company are as follows. (1) Price-houriy wage fate $13.60, payroll taxes $0.60, and fringe benefits $1.30. (2) Quantity-actual production time 1.3 hours, rest periods and cleanup 0.30 hours, and setup. and downtime 0.20 hours.
Compute the following. (Round answers to 2 decimal places, es. 1.25.)
(a) Standard direct labor rate per heur.
(b) Standard direct labor hours pergallon. hours
(c) Standard labor cost per gallon.
The standard direct labor rate per hour is $15.50, the standard direct labor hours per gallon are 1.80 hours, and the standard labor cost per gallon amounts to $27.90.
(a) To compute the standard direct labor rate per hour, we need to sum up the price-hourly wage rate, payroll taxes, and fringe benefits. In this case, the price-hourly wage rate is $13.60, payroll taxes are $0.60, and fringe benefits are $1.30. Adding these values together, we get:
Standard direct labor rate per hour = $13.60 + $0.60 + $1.30 = $15.50
Therefore, the standard direct labor rate per hour is $15.50.
(b) To determine the standard direct labor hours per gallon, we need to consider the actual production time, rest periods and cleanup time, and setup and downtime. In this case, the actual production time is 1.3 hours, rest periods and cleanup time amount to 0.30 hours, and setup and downtime equal 0.20 hours. Adding these values together, we get:
Standard direct labor hours per gallon = 1.3 hours + 0.30 hours + 0.20 hours = 1.80 hours
Hence, the standard direct labor hours per gallon are 1.80 hours.
(c) The standard labor cost per gallon can be calculated by multiplying the standard direct labor rate per hour by the standard direct labor hours per gallon. In this case, the standard direct labor rate per hour is $15.50 and the standard direct labor hours per gallon are 1.80 hours. Multiplying these values together, we obtain:
Standard labor cost per gallon = $15.50/hour * 1.80 hours = $27.90
Thus, the standard labor cost per gallon is $27.90.
These calculations consider the price-hourly wage rate, payroll taxes, fringe benefits, actual production time, rest periods and cleanup time, and setup and downtime.
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Suppose a USA firm has to make a payment of 15 million (MM) Mexican Pesos (MXN) in 1 year. The current spot exchange rate is USD0.04994 per MXN and the 1-year forward exchange rate is USD0.04962 per MXN.
Describe the forward transaction that would act as a hedge to the scheduled payment of MXN 15MM in one year. Would the firm contract to buy or sell MXN forward at USD0.04962 per MXN? With the forward contract how much is the firm going to have to pay in USD in one year? Explain why this forward contract works as a hedge.
To hedge the scheduled payment of MXN 15 million in one year, the USA firm would enter into a forward contract to sell MXN forward at USD0.04962 per MXN(Mexican Pesos).
By entering into this forward contract, the firm locks in the exchange rate at which it will sell MXN and buy USD in the future. This helps protect the firm from potential fluctuations in the exchange rate, ensuring a known and fixed exchange rate for the payment.
The amount the firm will have to pay in USD in one year can be calculated as follows:
Payment in USD = Amount in MXN × Forward exchange rate
Payment in USD = 15,000,000 MXN × USD0.04962/MXN
Payment in USD ≈ USD 744,300
Therefore, the firm will have to pay approximately USD 744,300 in one year to fulfill its payment obligation of MXN 15 million.
This forward contract works as a hedge because it allows the firm to mitigate the exchange rate risk associated with the payment. If the spot exchange rate were to fluctuate unfavorably by the time the payment is due, the firm could face a higher USD payment amount. However, by entering into the forward contract, the firm secures a predetermined exchange rate, protecting itself from potential losses due to adverse exchange rate movements.
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Recently, central banks throughout the world have been paying close attention to the rising inflation, and they are considering to increase the interest rates. If the interest rates go up, which of the following bonds will be the best investment to have?
Group of answer choices
A 5% coupon bond with 7 years to maturity.
A 8% coupon bond with 4 years to maturity.
A 3% coupon bond with 6 years to maturity.
A 2% coupon bond with 2 years to maturity.
In a scenario where interest rates are expected to increase, the best investment among the given bond options would be the 2% coupon bond with 2 years to maturity.
When interest rates rise, the prices of existing bonds tend to fall. This is because investors can now earn higher yields by purchasing newly issued bonds with higher interest rates. The impact of rising interest rates on bond prices is inversely related to the time to maturity and the coupon rate.
In this case, the 2% coupon bond with 2 years to maturity would be the best investment choice. This is because it has the shortest maturity and the lowest coupon rate among the options provided. With a shorter time to maturity, the bond's price is less sensitive to changes in interest rates compared to longer-term bonds. Additionally, the low coupon rate means that the bond's cash flows are not as reliant on interest payments, reducing the potential loss in value due to rising rates.
On the other hand, the 5% coupon bond with 7 years to maturity would be the least desirable option. Its longer maturity period and higher coupon rate make it more susceptible to interest rate fluctuations, resulting in greater potential price declines.
Overall, when interest rates are expected to rise, it is generally favorable to hold bonds with shorter maturities and lower coupon rates, as they tend to be less affected by interest rate changes and offer greater flexibility for reinvestment at higher rates in the future.
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Casey Motors recently reported net income of $103 million. The firm's tax rate was 40.0% and interest expense was $34 million. The company's after-tax cost of capital is 8.0% and the firm's total investor supplied operating capital employed equals $618 million. What is the company's EVA? (Answers are in $ millions.)
O a. $73.96
O b. $103.00
O c. $171.67
O d. $123.40
O e. $49.44
If the yield curve is downward sloping, what is the yield to maturity on a 10 -year Treasury coupon bond, relative to that on a 1-year T-bond?
O a. The yield on the 10-year bond is less than the yield on a 1-year bond.
O b. The yield on a 10-year bond will always be higher than the yield on a 1-year bond because of maturity risk premiums.
O c. It is impossible to tell without knowing the coupon rates of the bonds.
O d. The yields on the two bonds are equal.
O e. It is impossible to tell without knowing the relative risks of the two bonds.
The answer is option A. EVA measures how much value is created by the firm in excess of the required return of its investors. A positive EVA means that the firm is generating returns in excess of the cost of capital. In this case, Casey Motors' EVA is $49.44 million.
Answer: Casey Motors' EVA is $49.44 million.
EVA = Net Operating Profit After Taxes (NOPAT) - Invested Capital x After-Tax Cost of Capital
Therefore, Casey Motors' EVA is calculated as follows:
EVA = $103 million - ($618 million x 8%)
EVA = $49.44 million
Explanation: The formula for Economic Value Added (EVA) is: EVA = Net Operating Profit After Taxes (NOPAT) - Invested Capital x After-Tax Cost of Capital
Where, NOPAT = Net income + Interest expense x (1 - Tax rate)
Invested capital = Operating capital + Net fixed assets
EVA measures how much value is created by the firm in excess of the required return of its investors. A positive EVA means that the firm is generating returns in excess of the cost of capital. In this case, Casey Motors' EVA is $49.44 million. If the yield curve is downward sloping, the yield to maturity on a 10-year Treasury coupon bond is less than the yield on a 1-year bond. Therefore, the answer is option A. The yield on the 10-year bond is less than the yield on a 1-year bond. The yield curve is a graph that shows the relationship between bond yields and maturities. When the yield curve slopes downward, it indicates that investors expect interest rates to decline in the future. As a result, long-term bonds will have lower yields than short-term bonds. This is because the longer the bond's maturity, the more uncertainty there is about future interest rates.
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On 30 June 2023 , Teddy Ltd. paid $140,000 to buy all the shares of Millie Ltd. On this date, Millie Ltd. reported the following balances.
Share capital $73,000
Retained earnings $34,000
General Reserve $15,000
On the date of acquisition, all the assets and liabilities of Millie Ltd. were at fair value, except:
- Land was recorded at a cost of $190,000 but had a fair value of $150,000
- Millie Ltd. had recorded $60,000 as an expense for in-process research and development. However, Teddy Ltd. considered that this research and development was now an asset with a fair value of $32,000. Millie Ltd. considered that the fair value should be $45,000.
Required:
a) Prepare the acquisition analysis on 30 June 2023. (1 mark)
b) Prepare all the relevant journal entries required for the consolidation worksheet on 30 June 2023. (1 mark)
c) Justify your assumptions you made in preparing the acquisition analysis in question 1 . (1 mark)
Teddy Ltd. owns all the share capital of Millie Ltd. The income tax rate is 30%.
Required:
Prepare all the relevant journal entries required for the consolidation worksheet on 30 June 2023 for the following independent transactions.
a) On 1 September 2022, Millie Ltd. borrowed $80,000 from Teddy Ltd. at an annual interest rate of 5.4%. The loan term was for 5 years, and it was an interest-only loan with interest payable by 31 July every year. (1 mark)
b) Millie Ltd. sold inventory costing $28,000 to Teddy Ltd. Millie Ltd. recorded an $8,000 profit before tax on these transactions. All these transactions occurred during the financial year 2022-23. On 30 June 2023 , Teddy Ltd. sold 90% of the inventory to external parties, and the receivable was still outstanding. (2 marks)
a. On June 30, 2023, Teddy Ltd. acquired all the shares of Millie Ltd. for $140,000.
b. At the time of acquisition, Millie Ltd. had the following balances: Share capital of $73,000, Retained earnings of $34,000, and General Reserve of $15,000.
c. The fair value adjustments for the acquisition were as follows: Land was adjusted from $190,000 to $150,000, and in-process research and development was adjusted from $60,000 to either $32,000 (according to Teddy Ltd.) or $45,000 (according to Millie Ltd.).
To prepare the acquisition analysis on June 30, 2023:
- The consideration paid by Teddy Ltd. for the shares of Millie Ltd. is $140,000.
- The fair value adjustments for land and in-process research and development need to be considered.
The journal entries for the consolidation worksheet on June 30, 2023, are as follows:
- Dr. Land (Fair Value Adjustment) for $40,000
- Cr. Land for $40,000
- Dr. In-Process Research and Development (Fair Value Adjustment) for $13,000 or $26,000 (depending on the chosen fair value)
- Cr. In-Process Research and Development for $13,000 or $26,000
The assumptions made in preparing the acquisition analysis are based on the fair value adjustments provided. Teddy Ltd. believes the fair value of in-process research and development is $32,000, while Millie Ltd. believes it is $45,000. These differences in fair value should be justified by considering factors such as the current market value and future potential of the research and development assets.
Regarding the independent transactions for the consolidation worksheet on June 30, 2023:
a) On September 1, 2022, Millie Ltd. borrowed $80,000 from Teddy Ltd. at an annual interest rate of 5.4%. The loan term is for 5 years, and it is an interest-only loan. The journal entry would be:
- Dr. Loan from Teddy Ltd. for $80,000
- Cr. Cash for $80,000
- Dr. Interest Expense for $4,320 ([$80,000 * 5.4%] for one year)
- Cr. Interest Payable to Teddy Ltd. for $4,320
b) Millie Ltd. sold inventory costing $28,000 to Teddy Ltd. and recorded an $8,000 profit before tax. On June 30, 2023, Teddy Ltd. sold 90% of the inventory to external parties, and the receivable was still outstanding. The journal entries would be:
- Dr. Accounts Receivable from Teddy Ltd. for $25,200 (90% of $28,000)
- Cr. Sales Revenue for $25,200
- Dr. Cost of Goods Sold for $25,200 (90% of $28,000)
- Cr. Inventory for $25,200
These journal entries account for the loan transaction and the inventory sale between Teddy Ltd. and Millie Ltd., ensuring accurate consolidation in the financial statements.
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When a company charges consumers different prices for the same product Price war Price floor Price discrimination Price ceiling Costs that have already been paid and they cannot be undone, and so they shouldn't be still part of the decision-making process. Opportunity costs Marginal costs Variable costs Sunk costs
When a company charges consumers different prices for the same product, it is practicing price discrimination. Price discrimination occurs when a firm charges different prices to different customers based on factors such as their willingness to pay, location, age, or any other relevant characteristics.
The goal of price discrimination is to maximize profits by capturing the maximum amount of consumer surplus.Price discrimination can take various forms, such as offering discounts to certain customer segments, implementing tiered pricing structures, or providing personalized pricing based on individual preferences. By tailoring prices to different consumer groups, companies can extract more value from their customers and increase their overall revenue.Therefore, the relevant term in this context is price discrimination.
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Which of the choices below is not a problem with calculating CPI? Composition Non-market production Weighting Quality Question 13 2 pts Which example below is not counted in GDP? Consumers buy bread on the market The baker sells bread on the market Illegal drugs sold on the market. The farmer sells grain on the market. Question 14 2 pts Which example below is not counted in GDP? Mom buys gasoline Mom buys groceries Mom is a chef at a restaurant Mom is the chef of the household Question 15 2 pts Which example below is not counted in GDP? The price of a property falls when an airport is built next door Jerry sues the factory for polluting his property and wins A factory spills pollutants into a river nobody owns The environment is never counted in GDP
12. The problem that is not associated with calculating CPI is "Weighting Quality." 13. The example that is not counted in GDP is "Illegal drugs sold on the market." 14. The example that is not counted in GDP is "Mom is the chef of the household." 15. The example that is not counted in GDP is "The environment is never counted in GDP."
12. The Consumer Price Index (CPI) is a measure of inflation that reflects the average change in prices over time for a basket of goods and services consumed by households. While there are several potential issues or challenges in calculating CPI, "Weighting Quality" is not one of them.
The other options listed - Composition, Non-market production, and Quality - are recognized problems in CPI calculations.
13. Gross Domestic Product (GDP) is a measure of the total value of goods and services produced within a country's borders over a specific period. In the given examples, all of them involve market transactions except for "Illegal drugs sold on the market." The sale of illegal drugs is an illicit activity and falls outside the scope of legal market transactions. Therefore, it is not counted in GDP.
14. GDP measures the value of final goods and services produced within an economy. In the given examples, the first three options involve market transactions: buying bread, selling bread, and buying groceries. These activities contribute to GDP as they involve the exchange of goods or services for money.
However, "Mom is the chef of the household" refers to an activity within the household and does not involve market transactions. It is considered non-market production and is not included in GDP calculations.
15. GDP measures the market value of goods and services produced within an economy, but it does not account for environmental factors directly. While economic activities may impact the environment, such as pollution or the construction of an airport, the changes in environmental conditions themselves are not included in GDP calculations.
GDP focuses on economic production and does not capture the full extent of environmental costs or benefits. Other indicators, such as environmental indices or measures, are used to assess environmental impacts separately from GDP.
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Sarah purchased a warehouse for £420,000 in September 2020. She
sold a retail premises to Bettina for £152,000 in November
2020.
How much Stamp Duty is payable on these transactions and by
whom?
The cost recovery deduction for Rod in 2025 would be $1,686,164.38.
Detailed Explanation:
a. Cost Recovery Deduction for 2020:
To calculate the cost recovery deduction for 2020, we first need to determine the depreciation method and the useful life of the warehouse. The IRS provides guidelines for various property classes and depreciation methods. For commercial real estate, including warehouses, the most common method is straight-line depreciation over a useful life of 39 years.
Determine the Annual Depreciation Expense:
To calculate the annual depreciation expense, we divide the cost of the warehouse by its useful life:
Depreciation Expense = Cost of Warehouse / Useful Life
Depreciation Expense = $1,950,000 / 39 years = $50,000 per year
Calculate the Deduction for 2020:
Since Rod purchased the warehouse on April 14, 2020, we need to prorate the deduction for the portion of the year that he owned the property. From April 14 to December 31, 2020, there are 261 days.
Prorated Depreciation Expense = Depreciation Expense * (Number of Days Owned / Total Days in a Year)
Prorated Depreciation Expense = $50,000 * (261 / 365) = $35,890.41
Therefore, the cost recovery deduction for Rod in 2020 would be $35,890.41.
b. Cost Recovery Deduction for 2025:
To calculate the cost recovery deduction for 2025, we need to determine the remaining depreciable basis of the warehouse at the time of sale. The depreciable basis is the original cost minus the accumulated depreciation.
Calculate Accumulated Depreciation:
Since Rod sold the warehouse on September 29, 2025, we need to calculate the accumulated depreciation up to that date. The warehouse was owned for a total of 5 years and 167 days, or 1,924 days.
Accumulated Depreciation = Depreciation Expense * (Number of Days Owned / Total Days in a Year)
Accumulated Depreciation = $50,000 * (1,924 / 365) = $263,835.62
Determine the Remaining Depreciable Basis:
Remaining Depreciable Basis = Cost of Warehouse - Accumulated Depreciation
Remaining Depreciable Basis = $1,950,000 - $263,835.62 = $1,686,164.38
Calculate the Deduction for 2025:
The deduction for 2025 would be the remaining depreciable basis, as the entire amount is depreciated in the year of sale.
Deduction for 2025 = Remaining Depreciable Basis = $1,686,164.38
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The shareholders' equity section of Jason Company as of December 31, 2017, was as follows:
Common stock $180,000
Additional paid-in capital (Common stock) 110,000
Retained earnings 160,000
Total shareholders' equity $450,000
.
On January 15, the company repurchased 1,500 shares of its own common stock at $60 to hold as treasury stock. Which of the following would be included in the journal entry recorded on January 15?
A. A credit to Retained Earnings for $90,000
B. A debit to Cash for $90,000
C. A debit to Treasury Stock for $90,000
D. A debit to Common Stock for $90,000
The Debit to Treasury Stock for $90,000 would be included in the journal entry recorded on January 15. Option c is correct.
The treasury stock is that portion of the shares that have been issued by the company and were subsequently repurchased by the same organization. The repurchased shares would be held as treasury stock. Treasury stock is shares that a company has issued and subsequently bought back from the public.
These shares are regarded as issued and outstanding shares, but they do not carry the right to vote and do not qualify for dividends. These shares can be sold again in the open market or retired after they have been purchased.
The debit portion of the journal entry will reflect the reduction in cash and the credit portion of the journal entry will reflect the addition of treasury shares. When a company purchases treasury stock, the corporation's stockholders' equity is reduced by the cost of treasury shares purchased.
Therefore, c is correct.
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Jaden wants to hedge an account receivable of 830,000 Philippine peso (PHP) with American options. The total option premium to hedge this transaction is 12,000 U.S. dollars. The spot exchange rate for a Philippine peso is USD 1.1807, and the one-month forward rate is USD 1.2867. Suppose, the strike price of a put option on PHP is USD 1.0258 and the strike price of a call option on PHP is USD 1.0573, what will be the breakeven exchange rate if Jaden acts rationally? a. 1.0403 b. 1.1662 c. 1.2722 d. 1.0113
The breakeven exchange rate will be 1.0403. This means that if the exchange rate falls below 1.0403, Jaden will exercise the put option to sell PHP at a higher rate and offset the losses on the account receivable.
To determine the breakeven exchange rate, we need to calculate the amount of PHP that can be purchased with the option premium. The premium of $12,000 USD can buy $12,000 / $1.0258 = PHP 11,684.32. To hedge the account receivable, Jaden will receive PHP 830,000. The breakeven exchange rate is therefore 830,000 / 11,684.32 = 1.0403.
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(a) Treasury bond markets in New Zealand and the U.S. are dealer mar- kets. What are the pros and cons of this market structure as com- pared to trading securities on an exchange?
(b) The Reserve Bank of New Zealand reports the following (annually compounded) treasury bond spot rates (as of 26 July 2022).
Maturity Rate
1 year 3.38
2 years 3.53
5 years 3.53
10 years 3.60
Can we conclude that the market is expecting short term interest rates to rise over the next 10 years? Discuss.
(c) You are in the United States. The date is 26 July 2022. You decide that the market has under-estimated the yield on long term Treasury bonds. You observe the following bond:
Maturity 15 May 2052
Coupon 2.875
Price 97.1340
Yield 3.007
Describe how you would use this bond to trade in order to profit from your beliefs.
(a) Pros of dealer markets: Liquidity, flexibility, and faster execution. Cons: Lack of transparency, potential for higher transaction costs, and limited price discovery compared to exchange trading.
(b) The given spot rates indicate that the market expects short-term interest rates to remain relatively stable over the next 10 years, as the rates for 1 year, 2 years, and 5 years are all similar. However, the slight increase in the 10-year rate suggests a modest expectation of a rise in long-term interest rates.
(c) To profit from the belief that the market has underestimated the yield on long-term Treasury bonds, one could short-sell the bond by borrowing and selling it at the current price of 97.1340. Then, if the yield increases as anticipated, the bond's price would decline. At a lower price, the trader can repurchase the bond and return it, profiting from the difference between the initial sale price and the repurchase price.
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Please ASAPP I HAVE ONLY 30 MINUTES PLEASE HELP ME. answer in your own terms ASAPPP PLEASE QUESTION PER QUESTION FOLLOW THE INSTRUCTIONS
SUBJECT: Sales Management
SOLVE QUESTION PER QUESTION
A.Problem-solving selling extends need satisfaction selling to include alternative solutions for the customer to consider in meeting their needs. Discuss when problem-solving selling is warranted and why.
B.Consultative selling is focused on helping the customer’s organization achieve its strategic goals by working collaboratively. Provide an example of an organization or brand that effectively uses consultative selling and discuss the roles of strategic orchestrator, business consultant, and long-term ally.
A. Problem-solving selling is an approach that goes beyond simply satisfying customer needs by offering alternative solutions to meet those needs. It involves identifying the customer's challenges or problems and working collaboratively to find the best solution. In this section, we will discuss when problem-solving selling is warranted and why.
Problem-solving selling is warranted in situations where customers face complex challenges or have unique requirements that cannot be met by standard products or services. It is particularly relevant in industries with rapidly changing technology, diverse customer needs, or intense competition. By offering alternative solutions, salespeople can differentiate themselves from competitors and provide value-added services to customers.
Problem-solving selling is essential for customers who require customized solutions tailored to their specific needs. This approach allows salespeople to understand the customer's pain points, explore different options, and co-create innovative solutions. By engaging in problem-solving discussions, salespeople can build trust, credibility, and long-term relationships with customers.
Furthermore, problem-solving selling is warranted when customers are seeking strategic partnerships or long-term collaborations. In these cases, salespeople act as trusted advisors, helping customers achieve their business objectives by offering innovative solutions and continuous support. By taking a problem-solving approach, salespeople become valuable partners in driving customer success.
B. Consultative selling is a customer-focused approach that aims to help the customer's organization achieve strategic goals through collaborative efforts. It involves understanding the customer's business objectives, providing expert guidance, and working closely with the customer throughout the sales process. In this section, we will provide an example of an organization or brand that effectively uses consultative selling and discuss the roles of strategic orchestrator, business consultant, and long-term ally.
An example of an organization that effectively uses consultative selling is Salesforce, a leading customer relationship management (CRM) software provider. Salesforce adopts a consultative approach by focusing on understanding the unique needs and challenges of its customers. Its sales team acts as strategic orchestrators, working closely with customers to identify their business goals, align CRM solutions with their objectives, and develop customized implementation strategies.
Salesforce salespeople also play the role of business consultants, offering expert advice and insights to help customers optimize their sales, marketing, and service processes. They analyze customer requirements, identify areas for improvement, and propose tailored solutions that align with the customer's strategic goals. By providing valuable guidance, Salesforce salespeople establish themselves as trusted advisors to their customers.
Additionally, Salesforce acts as a long-term ally by fostering ongoing relationships with its customers. It offers continuous support, training, and updates to ensure customers achieve long-term success. Through its consultative selling approach, Salesforce establishes itself as a partner invested in its customers' growth and provides the necessary resources and expertise to help them achieve their strategic objectives.
Problem-solving selling is warranted when customers face complex challenges or require customized solutions that go beyond standard offerings. It helps build trust, differentiation, and long-term relationships with customers.
Consultative selling, on the other hand, focuses on helping customers achieve strategic goals through collaborative efforts. Organizations like Salesforce effectively use consultative selling by acting as strategic orchestrators, business consultants, and long-term allies. By adopting a consultative approach, organizations can provide tailored solutions and become trusted partners in driving customer success.
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