Lyle Company maintains a petty cash fund for small expenditures. These transactions occurred during the month of August.
Aug. 1 Established the petty cash fund by writing a check on Westown Bank for $226. 15 Replenished the petty cash fund by writing a check for $188. On this date, the fund consisted of $38 in cash and these petty cash receipts: freight-out $61.40, entertainment expense $23.00, postage expense $20.70 and miscellaneous expense $80.11. 16 Increased the amount of the petty cash fund to $426 by writing a check for $200. 31 Replenished the petty cash fund by writing a check for $296. On this date, the fund consisted of $130 in cash and these petty cash receipts: postage expense $132.00, entertainment expense $129.40, and freight-out $33.40.
1.) Journalize the petty cash transactions.
2.) Post to the Petty Cash account
Answers
Answer:
Aug. 1 Established the petty cash fund by writing a check on Westown Bank for $226.
Dr Petty cash fund 226
Cr Cash 226
15 Replenished the petty cash fund by writing a check for $188. On this date, the fund consisted of $38 in cash and these petty cash receipts: freight-out $61.40, entertainment expense $23.00, postage expense $20.70 and miscellaneous expense $80.11.
Dr Freight out expense 61.40
Dr Entertainment expense 23
Dr Postage expenses 20.70
Dr Miscellaneous expenses 80.11
Dr Cash short and over 2.79
Cr Petty cash fund 188
Dr Petty cash fund 188
Cr Cash 188
16 Increased the amount of the petty cash fund to $426 by writing a check for $200.
Dr Petty cash fund 200
Cr Cash 200
31 Replenished the petty cash fund by writing a check for $296. On this date, the fund consisted of $130 in cash and these petty cash receipts: postage expense $132.00, entertainment expense $129.40, and freight-out $33.40.
Dr Freight out expense 33.40
Dr Entertainment expense 129.40
Dr Postage expenses 132
Dr Cash short and over 1.20
Cr Petty cash fund 296
Dr Petty cash fund 296
Cr Cash 296
Related Questions
Alfred E. Old and Beulah A. Crane, each age 42, married on September 7,2017. Alfred and Beulah will file a joint return for 2019. Alfred's Social Security number is 111-11-1109. Beulah's Social Security number is 123-45-6780, and she adopted "Old" as her married name. They live at 211 Brickstone Drive, Atlanta, GA 30304. Alfred was divorce from Sarah Old in March 2016. Under the divorce agreement, Alfred is to pay Sarah $1,250 per month for the next 10 years or until Sarah's death, whichever occurs first. Alfred pays Sarah $15,000 in 2019. In addition, in January 2019, Alfred pays Sarah $50,000, which is designated as being for her share of the marital property. Also, Alfred is responsible for all prior years' income taxes. Sarah's Social Security number is 123-45-6788. Alfred's salary for 2019 is $150,000. He is an executive working for Cherry.Inc. (Federal I.D. No. 98-7654321). As part of his compensation package, Cherry provides him with group term life insurance equal to twice his annual salary. His employer withheld $24,900 for Federal income taxes and $8,000 for state income taxes. The proper amounts were withheld for FICA taxes. Beulah recently graduated from law school and is employed by Legal Aid Society.Inc. (Federal I.D. No. 11-1111111), as a public defender. She receives salary of $42,000 in 2019. Her employer withheld $7,500 for Federal income taxes and $2,400 for state income taxes. The proper amounts were withheld for FICA taxes. Alfred and Beulah had interest income of $500. They received $1,900 refund on their 2018 state income taxes. They claimed the standard deduction on their 2018 Federal income tax return. Alfred and Beulah pay $4,500 interest and $1,450 property taxes on their personal residence in 2019. Their charitable contributions total $2,400 (all to their church). They paid sales taxes of $1,400, for which they maintain the receipts. Alfred and Beulah have never owned or used any virtual currency, and they do not want to contribute to the Presidential Election Campaign. Compute the Old's net tax payable (or refund due) for 2019. Suggested software: ProConnect Tax Online
Answers
To compute the Olds' net tax payable (or refund due) for 2019, we need to gather all the relevant information and calculate their taxable income, apply the appropriate tax rates, deductions, and credits. Since the tax calculation involves various factors and tax laws, it would be best to use tax software such as ProConnect Tax Online or consult with a tax professional. The software will streamline the process and ensure accurate calculations based on the specific tax laws and regulations applicable to the Olds' situation.
During its first year of operations, Drone Zone Corporation (DZC) bought goods from a manufacturer on account at a cost of $55,000. DZC returned $8,500 of this merchandise to the manufacturer for credit on its account. DZC then sold $43,000 of the remaining goods at a selling price of $69,600. DZC records sales returns as they occur and then records estimated additional returns at year-end. During the year, customers returned goods that had been sold at a price of $7,300. These goods were in perfect condition, so they were put back into DZC’s inventory at their cost of $4,500. At year-end, DZC estimated $9,510 of current year merchandise sales would be returned to DZC in the following year; DZC estimates $5,800 as its cost of this merchandise.
Required:
Prepare journal entries to record DZC's transactions and estimates, assuming DZC uses a perpetual inventory system.
Answers
Answer:
Explanation:
Journal Entries
Event Account Title and Explanation Debit Credit
1 Inventory (or merchandise) $ 55,000
Accounts Payable $ 55,000
To record the purchase on account
2 Accounts Payable $ 8,500
Inventory (or merchandise) $ 8,500
To record return the merchandise
3. Cash ( or Accounts receivable) $69,600
Sales Revenue $ 69,600
To record sales revenue
4. Cost of goods sold $43,000
Inventory (or merchandise inventory) $43,000
To record cost of goods sold
5. Sales return and allowances $7,300
Cash (or Accounts receivable) $7,300
To record the sales return
6. Inventory (or merchandise Inventory) $ 4,500
Cost of goods sold $4,500
To record the reversal of COGS (Cost of goods sold)
7. Sales return and allowances $ 9510
Allowances for sales return $9510
To record the allowances for the estimated return
8. Inventory - Estimated Return $5,800
Cost of goods $5,800
To record the allowances for the estimated -
return of the cost of goods sold
Fine-Cut Meats (Pty) Ltd purchased a delivery vehicle of R150 000 on 1 June 2021 on credit. The
owner was advised that the residual value of this truck is estimated at R30 000. The diminishing
depreciation method was adopted by the company in utilising assets over five years.
On 1 September 2021 the owner replaced equipment. The new equipment amounts to R45 000.
The replaced equipment was purchased on 1 January 2018 for R30 000 and sold for R5 000. The
company uses the straight-line depreciation method over a period of four years to report on
equipment.
Required:
Disclose the property, plant and equipment note in the financial statements of Fine-Cut Meats
(Pty) Ltd the year ended 31 December 2021 (25)
Answers
Total Liabilities & Shareholder's Equity 11280,00
How to represent the Income Statement?
Income Statement
Sales 4100,00
Less: Cost of Goods sold -1500,00
Gross Profit 2600,00
Less: Operating Expenses -980,00
Net Income 1620,00
Financial Statement
Assets
Current Assets:
Trade Debtors 640,00
Cash and Bank 3100,00
Prepaid Expenses 45,00
Total Current Assets 3785,00
Non Current Assets:
Plant & Machinery (5300,00 - 150,00) 5150,00
Motor Vehicles (1900,00-70,00) 1830,00
Office Furniture (550,00-35,00) 515,00
Total Non Current Assets 7495,00
Total Assets 11280,00
Liabilities & Shareholder's Equity
Current Liabilities:
Trade Creditors 1590,00
Total Current Liabilities 1590,00
Shareholder's Equity
Ordinary Shares 1200,00
Preference Shares 800,00
Retained Earnings (6070,00+1620,00) 7690,00
Total Shareholder's Rquity 9690,00
Total Liabilities & Shareholder's Equity 11280,00
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which of the following should not be recorded in income and expenditure account?
a.sale of old newspaper.
b.loss on sale of asset .
c.honorarium paid to the secretary .
d.Sale proceeds of furniture
Answers
Answer:
C. honorarium paid to the secretary
Explanation:
Which action is an example of a short-term savings goal?
A. Saving to buy a house
OB. Saving for college
C. Saving for a new smartphone
D. Saving to buy a new car
Answers
Answer:
C - Saving for a new smartphone
Explanation:
Due to the relatively low price of the phone compared to the other three options, you would only have to save around ~200$, making it a shorter term goal than saving for college, a house or a car, which is usually upwards of 10k
A for-profit institution that works with the general public to open and manage
savings accounts is known as a(n).
A. commercial bank
B. savings bank
C. credit union
D. investment bank
Answers
Answer:
B. savings bank
Explanation:
Savings bank is defined as a bank which helps customers or people to invest or deposit in interest giving accounts that will give a long term investment.
Savings bank were started in Europe in the 19th century. Saving banks gives interest on the deposit amount that is why its is a for-profit institution for general public. The interest saving banks give by investing in government and corporate debt.
Hence, the correct answer is "B. savings bank".
Why is pay a valuable part of employee recognition? What are the potential results
of not paying employees a competitive salary?
Answers
Answer:
seuruduusuwjr d ziw9r8q w
f the Federal Reserve sets the federal funds rate on the basis of inflation and the output gap, then the Federal Reserve is following:
Group of answer choices
money illusion.
inflation targeting.
the quantity theory.
Fed rule-of-thumb.
Answers
The Federal Reserve sets the federal funds rate on the basis of inflation and the output gap, then the Federal Reserve is following inflation targeting. Thus, option 'B' is the correct option.
How does the Federal Reserve respond to inflation?The ability of the Fed to influence interest rates is its main instrument for managing inflation. Based on its observations of the state of the economy, the Fed may decide to raise or reduce the federal funds rate, which serves as its benchmark rate.
The 2% inflation goal was adopted in slightly different wording in Canada, the United Kingdom, Japan, and other countries throughout time, but it has now grown to be recognized as an international norm among central banks all over the world. There are several justifications for such an objective.
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2 Drag each label to the correct location on the image. Match the situations to the benefits provided by personalized or online services. understanding the process clearly easy registration process faster filing of claim form understanding policy benefits and limitations addressing clarifications Personalized Insurance Service Online Insurance Service All rights resented
Answers
Answer: Here is the correct answer
Explanation:
A local unemployment office keeps track of the number of new claims filed each day. Based on data collected, it determines that the expected number of new claims filed per day is 2.4 with a standard deviation of 0.8688. Suppose that the office is open five days per week. The expected number of new claims filed per week at this office is ________________________ . A. 4.344 B. 10 C. 12 D. 7.4 E. 5.25
Answers
Answer:
C. 12
Explanation:
As the expected number of new claims filed per day is 2.4 and the office is open 5 days per week, to be able to find the expected number of new claims filed per week, you have to multiply the expected number of claims per day for the number of days that the office is open in a week:
Expected number of new claims filed per week= 2.4*5= 12
According to this, the answer is that the expected number of new claims filed per week at this office is 12.
The expected number of new claims filed per week at this office is option C. 12
Calculation of the expected number of new claimed:Since the expected number of new claims filed per day is 2.4 with a standard deviation of 0.8688.
So per week, there is 5 days
So, here the expected number should be
= 2.4*5
= 12
hence, option c is correct.
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What are the steps required to register for tax purposes at the state level ?
Answers
Answer: Register for E-Tax has (3) steps:
1. Complete and submit ttconnect ID Registration form
2. Activate your ttconnect ID
3. Visit a ttconnect Service center
Why is it important to stick to a study schedule even if you are caught up with everything? a It guarantees higher grades on your exams. b It helps to create good study habits. c It is time set aside so you can take a break from watching television. d It gives you more time to play your favorite game without interruption.
Answers
Answer:
Explanation:
B - It helps to create good study habits.
What will produce more accurate results when giving a survey?
A. Using the word "frequently" in a question
B. Creating face-to-face interviews
C. Adding boxes to check for answers
D. Creating an open questions
Answers
Answer:
Option B; Creating face-to-face interviews
Explanation:
Research has shown that face-to-face interviews tend to produce more accurate results when giving a survey. So the correct answer is option B.
Troy Engines Ltd. manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to produce and sell one type of carburetor to Troy Engines Ltd. for a cost of $55 per unit. To evaluate this offer, Troy Engines Ltd. has gathered the following information relating to its own cost of producing the carburetor internally:
Direct materials cost $34 per unit.
Troy Engines pays its direct labour employees $20 per hour; each carburetor requires 30 minutes of labour time.
Variable manufacturing overhead is allocated at 30% of direct labour cost.
Total fixed manufacturing cost amounts to $15 per unit, of which 60% is allocated common cost and the remaining 40% covers depreciation of special equipment and supervisory salaries. The special equipment has no resale value. Supervisory personnel will be transferred to a different department if the company decides to purchase the carburetor from the outside supplier.
Yearly production of this type of carburetor is 17,000 units.
Required:
1-a. Assume that the company has no alternative use for the facilities that are now being used to produce the carburetors. Compute the total differential cost per unit for producing and buying the product.
Answers
Answer:
The company has no alternative use for the facilities that are now being used to produce the carburetors is explained below in details.
Explanation:
A
Compute the total cost of making and buying the parts is explained in the image A.
B.
Reject
C.
Compute the total cost of making and buying the parts is explained in the image C.
D.
Accept
discuss the challenges that managers encounter in working with diverse populations
Answers
Explanation:
Managers face several challenges when working with diverse populations. These challenges can stem from cultural, social, and economic differences. Some of the common challenges managers encounter when working with diverse populations are discussed below:
1. Communication barriers: One of the biggest challenges managers face is communication barriers due to language differences, accents, or cultural norms. Managers must be able to communicate effectively with people from different backgrounds and adjust their communication style accordingly.
2. Stereotyping and bias: Managers must be careful to avoid stereotyping or bias towards individuals from different backgrounds. Stereotyping can lead to incorrect assumptions about an individual's skills, abilities, or motivations, which can affect their work performance and morale.
3. Different work styles: Diverse populations may have different work styles, preferences, and expectations. Managers must be flexible in accommodating different work styles to promote productivity and collaboration among team members.
4. Conflict resolution: Conflicts can arise when people from diverse backgrounds work together. Managers must be skilled in conflict resolution to maintain a positive and productive work environment.
5. Lack of cultural awareness: Managers must be aware of cultural differences and be sensitive to cultural norms and customs. A lack of cultural awareness can lead to misunderstandings, conflict, and miscommunication.
6. Different levels of experience and education: Diverse populations may have different levels of experience and education, which can affect their work performance and career development. Managers must be able to identify and address skill gaps and provide opportunities for professional development.
7. Inclusive leadership: Managers must practice inclusive leadership by creating an environment where everyone feels valued, respected, and included. This involves promoting diversity, equity, and inclusion in all aspects of the organization's policies and practices.
In summary, managers face several challenges when working with diverse populations. Effective communication, cultural awareness, conflict resolution, and inclusive leadership are some of the key skills and strategies that can help managers overcome these challenges and promote a positive and productive work environment.
You, a Captain, are a section chief in Military Personnel and 2d Lt Smith’s supervisor. Lt Smith is a Force Support Officer. She has been on active duty for a year and in her present job for 10 months. She supervises 21 enlisted personnel who perform a variety of administrative tasks in support of a tactical fighter wing. She majored in business administration in college, served 3 years as an administrative specialist, and was an E-4 before being accepted for OTS. As an enlisted member, she graduated from technical school as an honor graduate and was cited on numerous occasions for outstanding performance. Her supervisors considered her a valuable asset to the unit and an expert in her area of responsibility. She’s very enthusiastic about her work and plans to make the Air Force a career.
Lieutenant Smith took over her job 2 months after the unit had received a rating of “marginal” by the numbered Air Force Inspector General’s evaluation team. At the end of her first week on the job, Lt Smith called her NCOIC and key supervisors together and told them that she wouldn’t tolerate marginal performance, that she had previous experience in this type of work, and would be looking at the quality of their work very closely. Since that time, Lt Smith has attempted to supervise every phase of work in her office and, at times, has involved herself in even the most routine decisions. Lt Smith assigns people to certain jobs within the office, plans the work schedule, leave schedule, and does most of the counseling in the office.
In the last 6 months, Lt Smith has ordered several people to work overtime to complete routine work ahead of schedule. Each time this has happened, the NCOIC has asked the lieutenant for permission to speak to her immediate supervisor. On each occasion, the lieutenant has told the senior master sergeant he must not take these internal problems to you, because she’ll take care of any problems in her section--and the NCOIC should remember who writes his EPR.
Most of the time, when Lt Smith approaches the work or break area where the workers are congregated, she notices all conversation stops and the personnel won’t talk to her unless she addresses them first. After reviewing a report yesterday, Lt Smith became very impatient. She bypassed his NCOIC and took the report directly to the Airman who had typed it. While Lt Smith was berating the Airman about the typing errors, the NCOIC walked into the office and asked the Airman what the problem was. The lieutenant became flustered, told the NCOIC she was tired of doing his job for him, and shoved the report into his hands. Lt Smith then went into her office and slammed the door.
The NCOIC relayed this situation to you and asked for your help. How will you help? BACKGROUND
*ENVIRONMENT: Airforce Base
*PEOPLE INVOLVE: The Captain, Lt Smith, Airman and NCOIC.
PROBLEM DEFINATION
*Lt Smith Unprofessional Behavior
DIAGNOSIS
*Marginal Performance
*Previous Experience
*Enthusiastic With her Job
*Academic Credibility
Answers
The lieutenant Smith has taken leave, and everything is running smoothly. People are, however, more attentive when she is present. Decisions are being delayed, and morale was low. The and other important supervisors are worried which some people may decide to due to her supervision, leave the service style.
Several issues must be addressed as a result of this case study. Lieutenant Smith's micromanagement technique is causing morale issues and may lead to retention issues, which is one of the main concerns. It's also troubling that she's requesting people to work extra hours without proper authorization or regard for the impact on their personal lives.
As her boss, you ought to tackle these concerns with Lt Smith and advise her on proper supervisory techniques. You could advise her to delegate more responsibilities to her NCOIC and other key supervisors, and to concentrate in strategic planning and decision-making instead of micromanaging every detail. We should also emphasise the significance of adhering to proper procedures for authorising overtime and taking into account the impact on personnel.
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A food handler cannot find the ice scoop. What should the food handler do to be sure that customers are served safely
Answers
Answer:
use a spoon or find the scoop.
Explanation:
he can use a spoon instead and should not touch the other parts of spoon other then the handle.
Why are marketers sometimes "forced” to reposition their products or services? Il
your answers with examples.
Iar
Answers
Explaination
Marketers sometimes forced to reposition their services or products to ensure profitability the company has no other option but to reposition its services or products that would cater to a new target segment of their existing market and ensure sales or profitability.
ReasonThere could be many reasons for marketers repositioning their products.
The products are evolving and getting more features into it. They needs to marketed differently in order to make the customers aware of the new features, add-ons. In this case, it is better to reposition the products.
can you help with this riddle : he married many woman but has never married
Answers
Answer:
A priest
Explanation:
A contestant asks for 200,000 for 25% of their business, what value have they placed on their entire company?
Answers
Answer:
$800,000
Explanation:
25% of the business is equal to 200,000, according to the contestants.
The entire company value is equivalent to 100%
25% = 200,000
100% = ?
100% = 200,000/25 x 100
=$8,000 x 100
=$800,000
Berman & Jaccor Corporation's current sales and partial balance sheet are shown below.
This year
Sales $ 1,000
Balance Sheet: Assets
Cash $ 150
Short-term investments $ 125
Accounts receivable $ 150
Inventories $ 100
Total current assets $ 525
Net fixed assets $ 400
Total assets $ 925
Sales are expected to grow by 14% next year. Assuming no change in operations from this year to next year, what are the projected total operating assets?
Answers
Sorry but this is kind of confusing but can you plz help me with this math problem
Santa is trying to buy socks for all his elf helping the year. He went on Amazon and found a pack of 8 socks for $24. He wants to know what each socks cost to be able to write an equation, and later he wants to know how much 12 socks with cost him.
I need the Ratio, Unit Rate, C.O.P. And an equation
Answer:
Explanation:
Total Operating costs for this year = Cash + Acct. Receivable + inventories + net fixed assets
Total Operating costs = 150+150+100+400 = 800
(Short term investments are not included in operating costs)
Projected growth in costs (Assuming same as sales) = 12% *800 = 96
Projected total operating costs = $800+$96 = $896
Companies go through different phases to reach product/market fit. These phases are the:
A) idea stage, the prototype stage, the launch stage, the traction stage, and the growth stage
B) idea stage, the prototype stage, the launch stage, the traction stage, the monetization stage, and the growth stage
C) the prototype stage, the launch stage, the traction stage, the monetization stage, and the growth stage
D) idea stage, the traction stage, the monetization stage, and the growth stage
Answers
Companies go through different phases to reach product/market fit. These phases are the: idea stage, the prototype stage, the launch stage, the traction stage, the monetization stage, and the growth stage
Option B
How well does the product meet the market?In its most basic form, a product's "market fit" refers to the extent to which it fits the demands of a significant target audience. It has been known for a long time that this is the first phase in the process of developing a successful business in which the firm meets early adopters, receives feedback, and determines interest in its product.
In other words, the product-market fit also describes a scenario in which a firm's target customers are buying, using, and telling others about the company's product in numbers large enough to sustain that product's growth and profitability. This can be achieved when the product is tailored to meet the needs of the target customers.
In a nutshell, product-market fit is defined by Marc Andreesen, the man who is credited with creating this idea, as the process of locating a suitable market together with a product that is able to fulfill the requirements of that market.
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Leo is working on setting up a new network for his company. Every time he tries to connect the computers together, he finds another error. Leo is frustrated and walks outside to clear his head. What could Leo do next to show that he can display perseverance?
Question 8 options:
Leo should quit because he obviously cannot do the job.
Leo should take the rest of the day off to relieve some stress.
Leo should go back in and try again once he has gathered his thoughts.
Leo should tell another engineer to fix the problem.
Answers
Taking a break to clear his head and relieve some stress is a good idea, but it should not be the end of his efforts. After taking a break, Leo should go back in and try again, using the time away to gather his thoughts and approach the problem with renewed energy. Option 3
Leo's frustration with the constant errors in setting up the new network is understandable. However, displaying perseverance in this situation would require him to keep trying and not give up until the network is successfully established.
Giving up and quitting is not an option if Leo wants to display perseverance and prove his capability. It may also be helpful for Leo to seek assistance from his colleagues or superiors who may have more experience in setting up networks.
By continuing to work towards establishing the new network despite the setbacks, Leo can show that he has perseverance and is willing to put in the effort required to get the job done. It may take some time and patience, but eventually, Leo's persistence and dedication will pay off, and the network will be successfully set up, providing a significant benefit to his company.Leo should go back in and try again once he has gathered his thoughts.Option 3
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What is the maximum number of accounts allowed within the chart of accounts in QuickBooks Online Plus?
Answers
The maximum number of accounts allowed within the chart of accounts in QuickBooks Online Plus is: 250 chart.
What is chart of accounts in QuickBooks?Chart of accounts in QuickBooks can be defined as the account that are mostly use in tracking every financial statement or information.
The Chart of accounts in QuickBooks should not be more than 250 chart of account based on the fact that if your account is higher than 250 in your chart of account this can tend to lead to suspension of the subscription you made.
Therefore the maximum number of accounts allowed within the chart of accounts in QuickBooks Online Plus is: 250 chart.
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While airbags in cars have saved lives and lowered fatality rates, they have caused MORE accidents. Why has this happened? What do we call this idea in economics? Suppose the government was hoping to reduce the number of accidents (and was not concerned about fatalities), what should they require automakers to do?
Answers
The idea that airbags in cars have caused more accidents is known as the moral hazard problem in economics. This occurs when people take on more risk because they feel protected by insurance or safety features. In the case of airbags, drivers may feel invincible and drive more recklessly because they believe the airbag will protect them in case of an accident.
If the government was hoping to reduce the number of accidents and was not concerned about fatalities, they could require automakers to install technology that limits the speed of the vehicle or increases the distance between cars. They could also require automakers to install sensors that detect when a car is too close to another car and issue a warning to the driver. These measures would encourage safer driving practices and reduce the likelihood of accidents.
Firms HL and LL are identical except for their leverage ratios and the interest rates they pay on debt. Each has $25 million in invested capital, has $5 million of EBIT, and is in the 40% federal-plus-state tax bracket. Firm HL, however, has a debt-to-capital ratio of 55% and pays 11% interest on its debt, whereas LL has a 20% debt-to-capital ratio and pays only 10% interest on its debt. Neither firm uses preferred stock in its capital structure.
1. Calculate the return on invested capital (ROIC) for each firm. Round your answers to two decimal places.
ROIC for firm LL is %
ROIC for firm HL is %
2. Calculate the rate of return on equity (ROE) for each firm. Round your answers to two decimal places.
ROE for firm LL is %
ROE for firm HL is %
3. Observing that HL has a higher ROE, LL's treasurer is thinking of raising the debt-to-capital ratio from 20% to 60%, even though that would increase LL's interest rate on all debt to 15%. Calculate the new ROE for LL. Round your answer to two decimal places.
Answers
Answer:
A. ROIC for firm LL 12%
ROIC for firm HL 12%
B. ROE for firm LL 13.5%
ROE for firm HL 18.6%
C. New ROE for firm LL 16.5%
Explanation:
A. Calculation to determine the return on invested capital (ROIC) for each firm
Using this formula
ROIC=EBIT(1-T)/Total Invested Capital
Let plug in the formula
ROIC=$5 million(1-.40)/$25 million
ROIC=$5 million*.60/$25 million
ROIC=$3 million/$25 million
ROIC=0.12*100
ROIC=12% for both firms
Therefore the return on invested capital (ROIC) for each firm is:
ROIC for firm LL is 12%
ROIC for firm HL is 12%
B. Calculation to determine the rate of return on equity (ROE) for each firm.
Calculation for ROE for firm LL
First step is to calculate the Debt
Debt=$25 million*20%
Debt=$5 million
Second step is to calculate the Debt Interest
Debt Interest=$5 million*10%
Debt Interest=$500,000
Third step is to calculate the EBIT of firm LL
EBIT of firm LL=$5 million- $500,000
EBIT of firm LL=$4,500,000
Fourth step is to calculate Tax owed
Tax owed =$4,500,000*40%
Tax owed =$1,800,000
Fifth step is to calculate the Net income of firm LL
Net income of firm LL=$4,500,000-$1,800,000
Net income of firm LL=$2,700,000
Sixth step is to calculate the Equity for firm LL
Equity for firm LL=$25million-$5 million
Equity for firm LL=$20 million
Now let calculate the ROE using this formula
ROE=Net income /Equity
Let plug in the formula
ROE=$2,700,000/$20 million*100
ROE=13.5%
Calculation for ROE for firm HL
First step is to calculate the Debt
Debt=$25 million*55%
Debt=$13,750,000
Second step is to calculate the EBIT of firm HL
EBIT of firm HL=$5 million-[(55%*$25 million)*11%]
EBIT of firm HL=$5 million-($13,750,000*11%)
EBIT of firm HL=$5 million-$1,512,500
EBIT of firm HL=$3,487,500
Third step is to calculate the Tax owed
Tax owed =$3,487,500*40%
Tax owed =$1,395,000
Fourth step is to calculate the Net income of firm HL
Net income of firm HL=$3,487,500-$1,395,000
Net income of firm HL=$2,092,500
Fifth step is to calculate the Equity for firm HL
Equity for firm HL=$25million- $13,750,000
Equity for firm HL=$11,250,000
Now let calculate the ROE using this formula
ROE=Net income /Equity
ROE=$2,092,500/$11,250,000*100
ROE=18.6%
Therefore the rate of return on equity (ROE) for each firm is:
ROE for firm LL is 13.5%
ROE for firm HL is 18.6%
C. Calculation to determine the new ROE for LL
First step is to calculate the debt
Debt=$25 million*60%
Debt=$15 million
Second step is to calculate the Debt Interest
Debt Interest=$15 million*15%
Debt Interest=$2,250,000
Third step is to calculate the EBIT of firm LL
EBIT of firm LL=$5 million- $2,250,000
EBIT of firm LL=$2,750,000
Fourth step is to calculate the Tax owed
Tax owed =$2,750,000*40%
Tax owed =$1,100,000
Fifth step is to calculate the Net income of firm LL
Net income of firm LL=$2,750,000-$1,100,000
Net income of firm LL=$1,650,000
Sixth step is to calculate the Equity for firm LL
Equity for firm LL=$25million-$15 million
Equity for firm LL=$10 million
Now let calculate the New ROE using this formula
ROE=Net income /Equity
Let Plug in the formula
ROE=$1,650,000/$10 million*100
ROE=16.5%
Therefore the new ROE for LL is 16.5%
We Pay Insurance Co. will pay you $1,300 each quarter for 21 years. You want to earn a minimum interest rate of .93 percent per quarter. What is the most you are willing to pay today for these payments? Question 23 options: $71,774.46 $75,552.06
Answers
They are willing to pay today for these payments of $ 75,552.06.
The option (B) is correct.
One reason certain individuals purchase cash-esteem disaster protection is the possibility to acquire cash from the strategy later on. At the point when you purchased your insurance contract, the protection specialist might have promoted that you would get your own cash and repay yourself.
Given;
The period here is a quarter.
Rate = loan cost per period = 0.93%
Nper = 4 x 21 = 84
PMT = 1300
FV = future worth = 0
The most you will pay today for these installments = - PV (Rate, Nper, PMT, FV)
= -PV (0.93%, 84, 1300, 0) = $ 75,552.06.
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g Gamgee Company wishes to maintain a growth rate of 12.8 percent per year, a debt-equity ratio of 1.4, and a dividend payout ratio of 40 percent. The ratio of total assets to sales is constant at .94. What profit margin must the firm achieve
Answers
The Profit margin that must be achieved is 12.74%.
Profit marginFirst step
Return on equity= Growth rate /(1 + Growth rate) × Retention ratio
Return on equity=12.8% / (1 + 12.8%) × (100%-40%)
Return on equity= 0.128/(1 +0.128) × 0.60
Return on equity= 0.128/1.128 × 0.60
Return on equity= 0.128/0.6768×100
Return on equity= 18.91%
Second step
Now the profit margin is:
Profit margin= ROE / Asset turnover × Equity Multiplier
Profit margin= 18.91% / {(1/.94) × 1.4}
Profit margin= 0.1891 / 1.06 × 1.4
Profit margin= 12.74%
Inconclusion the Profit margin that must be achieved is 12.74%.
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Light emitting diode (LEDs) light bulbs have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.49 and lasts for 1,000 hours. A 15-watt LED, which provides the same light, costs $3.60 and lasts for 12,000 hours. A kilowatt hour of electricity costs $.125. A kilowatt-hour is 1,000 watts for 1 hour. However, electricity costs actually vary quite a bit depending on location and user type. An industrial user in West Virginia might pay $.04 per kilowatt-hour whereas a residential user in Hawaii might pay $.25. You require a return of 11 percent and use a light fixture 500 hours per year. What is the break-even cost per kilowatt-hour?
Answers
An LED bulb is more cost-effective than an incandescent bulb if the price of power is less than 2.44 cents per kWh.
Energy used = 60 watts x 1,000 hours = 60,000 watt-hours = 60 kilowatt-hours (kWh) Cost of electricity = 60 kWh x $0.125/kWh = $7.50 Cost of bulb = $0.49 Total cost = $7.50 + $0.49 = $7.99 For the LED bulb: Energy used = 15 watts x 12,000 hours = 180,000 watt-hours = 180 kWh Cost of electricity = 180 kWh x cost per kWh Cost of bulb = $3.60 To find the break-even cost per kWh, we need to set the total cost of using the LED bulb equal to the total cost of using the incandescent bulb: $3.60 + 180 kWh x cost per kWh = $7.99 180 kWh x cost per kWh = $4.39 cost per kWh = $4.39 ÷ 180 kWh cost per kWh = $0.0244 or about 2.44 cents per kWh
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Amazon Corporation has preferred stock outstanding that pays a $12.80 annual dividend. It price is $158. What is the required rate of return (yield) on the preferred stock?
Answers
Answer:
8.10%
Explanation:
The required rate of return (yield) on the preferred stock = Dividend / Price
= $12.80 / $158 = 0.0810126582278481 = 8.10%