BUSINESS COLLEGE

1.Calculate the present value (PV ) of a cash inflow of $500 in one year, and a cash inflow of $1,000 in 5 years, assuming a discount rate of 15%.

Answers

Answer 1

Answer:

Answer:

The present value of $500 in one year is $434.78 and the present value of $1,000 in 5 years is $497.18

Explanation:

Hi, we need to use the following formula

Present Value = Future Value/ (1+Discount Rate)^years

Therefore, in the case of $500 in one year.

Present Value = $500/(1+0.15)^1 = $434.78

And for $1,000 in 5 years

Present Value = $1,000/(1+0.15)^5 = $497.18

Notice that the discount rate (15%) has to be used in its decimal form, that is 0.15 (which you can get by dividing 15/100).

Best of luck.

Best of luck

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AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February: Fixed Component per Month Variable Component per Job Actual Total for February Revenue $280 $39,250 Technician wages $8,400 $8,250 Mobile lab operating expenses $4,800 $31 $9,290 Office expenses $2,400 $3 $2,700 Advertising expenses $1,580 $1,650 Insurance $2,870 $2,870 Miscellaneous expenses $970 $1 $425 The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,800 plus $31 per job, and the actual mobile lab operating expenses for February were $9,290. The company expected to work 150 jobs in February, but actually worked 154 jobs.Required: Prepare a flexible budget performance report showing AirQual Test Corporation's revenue and spending variances and activity variances for February.
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TaskMaster Enterprises employs a standard cost system in which direct materials inventory is carried at standard cost. TaskMaster has established the following standards for the prime costs of one unit of product.Standard Quantity Standard Price Standard Cost

Direct Materials 10 pounds $ 1.90 per pound $ 19.00
Direct Labor 0.30 hour $ 6.80 per hour 2.04
$ 21.04

During November, TaskMaster purchased 200,000 pounds of direct materials at a total cost of $440,000. The total factory wages for November were $48,000, 80% of which were for direct labor. TaskMaster manufactured 19,000 units of product during November using 175,000 pounds of direct materials and 6,000 direct labor hours.

What is the direct labor price (rate) variance for November?

Answers

Answer:

$2,400 Favourable

Explanation:

direct labor price (rate) variance =(Aq×Ap)-(Aq×Sp)

=(6,000×$6.40) - (6,000×$ 6.80)

= $2,400 Favourable

Ap = (48,000×80%)/6,000

= $6.40

Answer:

$2,400 Favourable

Explanation:

direct labor price (rate) variance =(Aq×Ap)-(Aq×Sp)

=(6,000×$6.40) - (6,000×$ 6.80)

= $2,400 Favourable

Ap = (48,000×80%)/6,000

= $6.40

Explanation:

Landis received $90,000 cash and a capital asset (basis of $50,000, fair market value of $60,000) in a proportionate liquidating distribution. His basis in his partnership interest was $120,000 prior to the distribution. How much gain or loss does Landis recognize, and what is his basis in the asset received?a. $0 gain or loss; $30,000 basis.b. $0 gain or loss; $50,000 basis.
c. $0 gain or loss; $60,000 basis.
d. $20,000 gain; $50,000 basis.
e. $30,000 gain; $60,000 basis.

Answers

Answer:

a. $0 gain or loss; $30,000 basis.

Explanation:

Since the partnership is being liquidated, Landis doesn't have to recognize any gain or loss resulting from the liquidation because the cash amount that he is receiving is less than his partnership interest. The asset's basis = $120,000 - $90,000 (cash) = $30,000, regardless of its current market value or prior basis.

At the end of 2020, Aramis Company has accounts receivable of $800,000 and an allowance for doubtful accounts of $40,000. On January 16, 2021, Aramis Company determined that its receivable from Ramirez Company of $6,000 will not be collected, and management authorized its write-off.a) Prepare the journal entry for Aramis Company to write off the Ramirez receivableb) What is the net realizable value of Aramis Company's accounts receivable before the write off of the Ramirez receivable?

c) What is the net realizable value of Aramis Company's accounts receivable after the write off of the Ramirez receivable?

Answers

Answer:

Journal entry for write off the Ramirez receivable

Debit Allowance for doubtful Accounts $6,000

Credit Accounts receivables $6,000

Net realizable Receivables (beginning balance)

= accounts receivable of $800,000 Less allowance for doubtful accounts of $40,000

Net realizable receivable = $760,000

Net realizable Receivables (closing balance)

= accounts receivable of $800,000

Less adjustment for write off $6,000

Closing Accounts receivables balance $794,000

Less

Opening allowance for doubtful accounts of $40,000

Less debt write off $6,000

Closing allowance for doubtful account = $34,000

Closing Net realizable receivable = $760,000

In its first year of operations, Gomes Company recognized $28,000 in service revenue, $6,000 of which was on account and still outstanding at year-end. The remaining $22,000 was received in cash from customers. The company incurred operating expenses of $15, 800. Of these expenses, $12,000 were paid in cash; $3, 800 was still owed on account at year-end. In addition, Gomes prepaid $2, 400 for insurance coverage that would not be used until the second year of operations. (a) Calculate the first year's net earnings under the cash basis of accounting, and calculate the first year's net earnings under the basis of accounting.
(b) Which basis of accounting (cash or accrual) provides more useful information for decision-makers?

Answers

Answer:

a. The first year's net earnings under the cash basis of accounting is $7,600 and the first year's net earnings under the basis of accounting is $12,200

b. Accrual basis of accounting provides more useful information.

Explanation:

a. In order to calculate the first year's net earnings under the cash basis of accounting we would have to use the following formula:

Cash basis net earnings = Service revenue (Cash) – Cash expenses – Prepaid expenses

Cash basis net earnings =$22,000 – $12,000 – $2,400

Cash basis net earnings =$7,600

In order to calculate the first year's net earnings under the the basis of accounting we would have to use the following formula:

Accrual basis net earnings = Service revenue – Operating expenses incurred

Accrual basis net earnings= $28,000 – $15,800

Accrual basis net earnings=$12,200

b. Accrual basis of accounting provides more useful information, because in this system revenues are recorded what actually earned and expenses are recorded what actually incurred for earning such revenues. Therefore, it gives better profit picture

Austin, Texas is host to a popular festival, South by Southwest (SXSW) which recently celebrated its 30th anniversary. It has released dates for the new year and invites participants for the unique music, film, and interactive events or sessions from March 10th through 19th. Which category of nontraditional marketing would best characterize the marketing activities to attract attendees for the multi-day festival? (A) event
(B) cause
(C) place
(D) organization

Answers

Answer:

The correct answer is (A) event

Explanation:

Event marketing is a strategy that consists of giving memorable experiences to the consumers of a brand, in order to last in their memory. This type of activity aims to identify the brand and connect with it.

Thanks to these events, the company increases its brand recognition, improves the image, establishes strong relationships with customers, employees and suppliers.

An agent informs owners in an area that a decline in property values over the past five years is due to an influx of minority families. He suggests that the trend will continue, and advises them to sell before it is too late. This agent is probably guilty of

Answers

Answer:

This agent is probably guilty of

Blockbusting

Explanation:

Blockbusting is an illegal act. It is a manipulative method used by real estate agents to get homeowners to sell or rent their property at a cheaper rate by lying to them that the socioeconomic demography of the neighborhood is changing, so they have to sell before it is too late. This can be seen in how the agent informs the owners that their property experienced a decline in the past 5 years because of the minorities who moved in. The Fair Housing Act of 1968 makes blockbusting illegal.

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