BUSINESS COLLEGE

At the start of the year, your firm's capital stock equaled $100 million, and at the end of the year it equaled $105 million. The average depreciation rate on your capital stock is 20%. Gross investment during the year equaled A) $1 million B) $5 million. C) $7 million D) $25 million

Answers

Answer 1
Answer:

Answer:

The answer is D.

Explanation:

Net investment equals Gross investment minus depreciation.

Net investment equals Investment at the beginning of the year minus Investment at the end of the year.

Net investment = $105 million - $100 million.

Net investment = $5million.

Depreciation = 20% of investment at the start of the year

= 20% of $100million

= $20million.

Gross investment is therefore,

$5million + $20million

=$25 million
Answer 2
Answer:

Answer:

Option D,$25 million is the correct answer.

Explanation:

The net investment formula can be used to compute gross investment by changing the subject of the formula as shown below:

Net investment = gross investment minus depreciation

Net investment =Closing capital stock minus opening capital stock

closing capital stock is $105 million

opening capital stock is $100 million

net investment=$105 million-$100 million=$5 million

Gross investment is unknown

depreciation=opening capital stock* depreciation %

depreciation=$100 million*20%

                     =$20 million

$5 million=gross investment-$20 million

gross investment =$5 million+$20 million

gross investment =$25 million

Related Questions

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Evans Products uses a process costing system with two processing departments: the Mixing Department and the Finishing Department. In June, unit costs incurred by the Mixing Department amounted to $4.00 per unit. Unit costs transferred to the finished goods warehouse during the month amounted to $22. Work-in-process inventories are reduced to zero each month. The entry to record the sale of 3,500 units in June would include:

Answers

Answer:

A debit to Work-in-Process Inventory, Finishing Department of $140,000.

Explanation:

$140,000 will be credited to Work-in-Process Inventory, Mixing Department and debited to Work-in-Process Inventory, Finishing Department.

Finishing department is a process department. Finished goods are debited only when goods are transferred from the last processing department to finished goods.

Calculations

Cost per units transferred $                4.00

Units transferred 3.500

Total cost of units transferred $ 1,40,000.00

Swifty Inc. has three divisions which are operated as profit centers. Actual operating data for the divisions listed alphabetically are as follows. Compute the missing amounts. Operating Data Women’s Shoes Men’s Shoes Children’s Shoes Contribution margin $304,020 $ (3) $202,680 Controllable fixed costs 112,600 (4) (5) Controllable margin (1) 101,340 106,970 Sales 675,600 506,700 (6) Variable costs (2) 360,320 281,500 Prepare a responsibility report for the Women’s Shoes Division assuming (1) the data are for the month ended June 30, 2020, and (2) all data equal budget except variable costs which are $5,630 over budget. SWIFTY INC. Women’s Shoe Division Responsibility Report For the Month Ended June 30, 2020 Difference Budget Actual Favorable Unfavorable Neither Favorable nor Unfavorable $ $ $ $ $ $

Answers

Answer:

(1) Controllable margin $ 191420

(2) Variable Costs$ 371580

(3) Contribution Margin $ 146380

(4)Controllable fixed costs $45,040

(5)  Controllable fixed costs $ 95710

(6) Sales  $ 484,180

Explanation:

The workings have been done to show the results.

Swifty Inc.

                Women’s Shoes     Men’s Shoes       Children’s Shoes

Sales             675,600               506,700                   (6) $ 484180

Variable costs (2)$ 371580     360,320                    281,500

C. Margin $304,020                $ (3)146380             $202,680

(2) Variable Costs = Sales - Contribution Margin= 675600- 304020=

$ 371580

(3) Contribution Margin= Sales - Variable Costs =  506,700-360,320 = $ 146380

(6) Sales = Contribution Margin + Variable Costs= 281,500 +$202,680 = $ 484,180

Swifty Inc.

                Women’s Shoes     Men’s Shoes       Children’s Shoes

Sales             675,600               506,700                  $ 484180

Variable costs $ 371580           360,320                    281,500

C. Margin        $304,020          $ 146380               $202,680

Controllable

fixed costs       112,600          (4)  $45,040                  (5) $ 95710

Controllable margin (1) $ 191420   101,340                      106,970

(1) Controllable margin=Contribution Margin-Controllable fixed costs

= $ 304,020  -112,600 =$ 191420

(4) Contribution Margin- Controllable margin=Controllable fixed costs

$ 146380  - 101,340  = $45,040

(5)  Contribution Margin- Controllable margin=Controllable fixed costs

$202,680 - 106,970 = $ 95710

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Answers

Answer:

A. more information should be gathered before deciding on which project, if either, is desirable.

Explanation:

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But to decide about a certain project it is better to know the interest yield, it is also important to get the life of the project and other information.

For example:

a.- 250 investment 100 per year  payback in 2.5-year life 3 years

b.- 500 investment 100 per year payback in 5-year life 20 years

While A payback occurs before project B is better

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Answers

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In January, Knox Company requisitions raw materials for production as follows: Job 1 $936, Job 2 $1,690, Job 3 $767, and general factory use $667.Prepare a summary journal entry to record raw materials used:

DEBIT CREDIT
Work in Process Inventory
Jan 31. Manufacturing Overhead
Raw Materials Inventory

Answers

Answer:

Materials used in production go to Work in Process so;

= 936 + 1,690 + 767

= $3,393

The materials used in the general factory will go to Manufacturing Overhead.

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Jan 31   Work in Process                                     $3,393

             Manufacturing Overhead                      $   667

             Raw Materials Inventory                                                    $4,060

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Answers

voir dire
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