On each December 31, you plan to transfer $3,600 from your checking account into an investment account. The investment account will earn 4 percent annual interest, which will be added to the account balance at each year-end. The first deposit will be made December 31, 2018 (at the end of the period). (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1) (Use appropriate factor(s) from the tables provided.)
Required:
What will be the balance in the account at the end of the 10th year (i.e., 10 deposits)? (Round "Future Value" to nearest whole dollar amount.)
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What is the total amount of interest earned on the 10 deposits? (Round your final answer to the nearest whole dollar amount.)
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ow much interest revenue did the fund earn in 2019? 2020? (Round your final answers to the nearest whole dollar amount.)
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In: Accounting
11. The following differences enter into the reconciliation of financial income and taxable income of Abbott Company for the year ended December 31, 2020, its first year of operations. The enacted income tax rate is 20% for all years. Pretax accounting income $800,000 Excess tax depreciation (480,000) Litigation accrual 70,000 Unearned rent revenue deferred on the books but appropriately recognized in taxable income 60,000 Interest income from New York municipal bonds (20,000) Taxable income $430,000
1. Excess tax depreciation will reverse equally over a four-year period, 2021-2024.
2. It is estimated that the litigation liability will be paid in 2024.
3. Rent revenue will be recognized during the last year of the lease, 2024.
4. Interest revenue from the New York bonds is expected to be $20,000 each year until their maturity at the end of 2024.
Instructions (a) Prepare a schedule of future taxable and (deductible) amounts. (b) Prepare a schedule of the deferred tax (asset) and liability at the end of 2020. (c) Since this is the first year of operations, there is no beginning deferred tax asset or liability. Compute the net deferred tax expense (benefit). (d) Prepare the journal entry to record income tax expense, deferred taxes, and the income taxes payable for 2020.
In: Accounting
Ali is a student at the University. He recently
purchased a car for OMR5,000 to use it for going to the University.
Ali also expects that other friends might ask for transportation
from him. He expects a total monthly revenue of OMR50. He expects
fuel cost to be OMR40 per month. One of Ali's friends is a taxi
driver. He offered Ali to take him to University for a monthly fee
of OMR10. Because he does not have to drive, Ali believes that he
can perform online work that would earn him a monthly revenue of
OMR30. What is the differential revenue in this scenario? Select
one: O a. OMR40 O b. OMR50 O c. OMR20 O d. OMR10 O e. OMR30
2.The total prime cost of a product was OMR5,200. The variable
manufacturing overhead is calculated based on the number of direct
labor hours. The variable manufacturing overhead cost per hour is
four times the direct labor cost per hour. The fixed manufacturing
overhead was OMR2,000. Assuming that direct labor hours were 350
and that the direct labor cost was 30% of direct materials cost,
how much is the total manufacturing cost? Select one: O a.
OMR12,000 O b. OMR18,000 c. OMR7,200 O d. OMR26,000 O e.
OMR28,000
In: Accounting
ABC Company had the following transactions during 2019:
May 1: Received $6000 cash in advance for services to be provided over the coming 10 months.
August 5: Sold Merchandise for $7560 including 8% sales tax.
September 1: Borrowed $20000 from FNB bank by issuing 6 months, 6% interest bearing note.
October 10: Sold merchandise on account for $6000 plus 10% sales tax.
December 31: Prepare the adjusting entry to record the service revenue earned.
December 31: Prepare the adjusting entry to record the accrued interest to FNB bank.
December 31: Remitted the sales taxes to the government.
Answer the below questions related to the above transactions
7) The earned amount of the service revenue on December 31 is" *
a) $3,500
b) $4,800
c) $4,500
d) $5,000
8) The remaining balance of the Unearned Service Revenue after December 31 is: *
a) Zero
b) 1,200
c) $3,000
d) $4,000
9) The accrued interest amount on December 31 on the borrowed amount from FNB Bank is: *
a) $300
b) $400
c) $500
d) None of the above
10) The amount of Taxes Payable remitted to the government on December 31 is: *
a) $560
b) $1,160
c) $1,720
d) $1,820
In: Accounting
Jacob Long, the controller of Arvada Corporation, is trying to prepare a sales budget for the coming year. The income statements for the last four quarters follow:
| First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Total | |||||||||||||||
| Sales revenue | $ | 90,000 | $ | 100,000 | $ | 105,000 | $ | 130,000 | $ | 425,000 | |||||||||
| Cost of goods sold | 54,000 | 60,000 | 63,000 | 78,000 | 255,000 | ||||||||||||||
| Gross profit | 36,000 | 40,000 | 42,000 | 52,000 | 170,000 | ||||||||||||||
| Selling & administrative expenses | 8,500 | 10,000 | 10,500 | 13,000 | 42,000 | ||||||||||||||
| Net income | $ | 27,500 | $ | 30,000 | $ | 31,500 | $ | 39,000 | $ | 128,000 | |||||||||
Historically, cost of goods sold is about 60 percent of sales revenue. Selling and administrative expenses are about 10 percent of sales revenue.
Fred Arvada, the chief executive officer, told Mr. Long that he expected sales next year to be 8 percent for each respective quarter above last year’s level. However, Rita Banks, the vice president of sales, told Mr. Long that she believed sales growth would be only 5 percent.
Required
Prepare a pro forma income statement including quarterly budgets for the coming year using Mr. Arvada’s estimate.
Prepare a pro forma income statement including quarterly budgets for the coming year using Ms. Banks’ estimate.
In: Accounting
2. On June 15, Muskoka Rentals (MR) entered into a contract to provide the following to Tomulka Inc for their event on August 15, 2018.
- 1,500 White folding chairs
- 40 large round tables
- 40 large table linens
- 1 arbour
-
The standard contract prices are as follows:
Standard cost per item
Chairs $2.50
Table linens $10
Round tables $20
Arbour $250
Delivery (including set up) $450
Pickup (Including tear down) $200
Muskoka Rentals has charged $5,500 total for the rental, set up, take down and delivery.
MR will deliver the items on August 15, 2018, and they will pick it up on August 22, 2018.
MR has never done business with Tomulka Inc in the past, however, the Tomulka Inc has an excellent credit rating.
Set up will occur on August 15, and takedown will occur on August 22.
Explain when revenue should be recognized for each source of revenue using the IFRS 15 revenue recognition criteria.
Prepare the journal entries.
Notes:
- You must address the 5 steps in IFRS 15
- Prepare step 4 using excel.
- Use excel files that utilize formulas and have been laid out in an easy to read manner.
In: Accounting
A perfectly competitive market does not imply which of the following?
| a. | The market price is established at the point where supply equals demand. | b. | Marginal benefit equals marginal cost. |
|---|---|---|---|
| c. | The firm’s price will be greater than marginal revenue. | d. | Production is carried out only until supply equals demand. |
Which of the following is not a point where firms produce in long-run equilibrium?
| a. | Marginal cost equals marginal revenue. | b. | Price is greater than marginal cost. |
|---|---|---|---|
| c. | The minimum average variable cost is below selling price. | d. | The minimum long-run average costs are equal to the selling price. |
A decrease in demand will not cause firms to do which of the following if they operate where marginal cost is equal to average total cost which is also equal to long-run average cost in long-run equilibrium?
| a. | Increase capital investment | b. | Produce efficiently |
|---|---|---|---|
| c. | Shift supply to the left | d. | Reduce output |
Firms will not do which of the following under perfect competition?
| a. | Be driven to produce at the lowest possible short-run average cost | b. | Produce at a point where marginal cost is greater than marginal revenue |
|---|---|---|---|
| c. | Select the most efficient plant size | d. | Minimize average cost in the long run |
In: Economics
A
new retail store is analyzing their monthly revenues per shopper to quantify the effect of the age of the shopper and the number of (monthly) shoppers on their monthly revenue. The owner feels that the revenue received per shopper increases with the age of the shopper and with the number of shoppers but wants a more quantitative explanation. The multiple regression output is shown below. answer with the help of excel
Summary output
Multiple R
0.8391
R-Square
0.7841
Adj R-Square
0.7683
StErr of Estimate
150.828
Regression output
Coefficient
Std Err
t-value
p-value
Constant
-54.986
331.204
…
0.0010
Age of shopper
79.017
10.647
Not provided
0.0000
Number of shoppers
14.973
10.443
…
0.1940
(1) Which input variable (i.e., explanatory variable) might you consider dropping based on a t-test? Why? Please explain convincingly.
(2) If you wanted to understand whether the shoppers aged 50 and
above impact the monthly revenue differently than those aged below
50, how would you proceed with the analysis? Would you define any
new variables and, if so, what variables? Please provide
details.
(3) What Excel formulas would you use to create the additional variables? Please provide details.
In: Statistics and Probability
A projection for a new product line was prepared by a task force from Engineering and Sales. The plan presented to management calls for an initial investment of $13,000,000 which is projected to generate annual revenue which increases at $750,000 per year, with a first year revenue of $5,000,000. Annual costs which are estimated at $2,750,000 for the first year, are expected to increase in direct proportion to the annual revenue. The task force has made a case for a 10 year study period, which managment has accepted. Calculate the annual rate of return (ROI) for this projection. The company uses a MARR of 12%. Is the project attractive?
During the task force's presentation, serious doubt is expressed by management about the first year cost estimate, the opinion is that it is too low. Management accepts the cost estimates for years 2 through 10. How large could the first year cost estimate be and still meet the 12% MARR?
In a second response to management's skepticism about the first year cost, the task force pointed out that the annual cost estimates do not include a learning and experience factor. THis has always been in excess of 5% for the company. Assuming that management accepts the sales pronections and the same annual cost reduction of 5%(for each year), what would be the ROI when this annual cost reduction is applied?
In: Accounting
Question 3 – 14 marks
The following selected data for Potato Inc. for 2017 was gathered by its accountants, who are responsible for preparing the financial statements:
Cost of good sold $56,500
Amortization Expense 14,000
Other operating expenses 17,700
Loss on sale of investments 1,500
Gain on sale of capital assets 8,500
Sales revenue 95,600
Interest revenue received 5,200
Dividend revenue received 2,500
Salary expense 27,200
Interest expense paid 5,900
Income tax expense 2,400
The cash balance on Jan. 1, 2017 has a balance of $15,000 and on Dec. 31, 2017, had a balance of $208,500
Other data gathered by the accountants for 2017:
Accounts receivable decreased $13,600
Inventory increased 6,800
Prepaid expenses decreased 2,700
Accounts payable increased 21,400
Salary payable increased 1,500
Accrued liabilities decreased 4,300
Income tax payable increased 800
Acquisition of capital assets 46,000
Issuance of common shares 80,000
Proceeds from sale of investments 35,000
Collection of loan principal 22,600
Payment of dividend 15,000
Proceeds of sale of capital assets 31,700
Proceeds from sale of repurchase of shares 45,000
In good form prepare the statement of cash flow for the year ended December 31,2017 using the direct method.
In: Accounting