Answer:
Explanation:
Account Name Debit Credit
Cash $160,000
Accounts Receivable $2,000
Equipment $ 18,300
Supplies $1,200
Contributed Capital $181,500
a. Received $80,000 cash from each of the two shareholders to form the corporation, in addition to $2,000 in accounts receivable, $5,300 in equipment, a van (equipment) appraised at a fair market value of $13,000 and $1,200 in supplies.
b. Purchased a vacant store for sale in a good location for $360,000, making a $72,000 cash down payment and signing a 10-year mortgage from a local bank for the rest
Account Name Debit Credit
Building $360,000
Cash $ 72,000
Notes Payable $288,000
c. Borrowed $50,000 from the local bank on a 10%, one year note.
Account Name Debit Credit
Cash $50,000
Notes Payable $50,000
d) Purchased and used food and paper supplies costing 10,830 in March; paid cash.
Purchase of Supplies:
Account Name Debit Credit
Supplies $10,830
Cash $10,830
Account Name Debit Credit
Supplies Expense $10,830
Supplies $10,830
e) Catered four parties in March for $4,200; $1,600 was billed and the rest was received in cash.
Account Name Debit Credit
Cash $2,600
Accounts Receivable $1,600
Catering Revenue $4,200
f. Made and sold food at the retail store for $11,900 cash. (assume the cost of these sales was already recorded as part of transaction d.)
Account Name Debit Credit
Cash $11,900
Food Sales Revenue $11,900
g. Received a telephone bill for March to be paid in April.
Account Name Debit Credit
Telephone Expense $420
Telephone Payable $420
h. Paid $363 in gas for the van in March
Account Name Debit Credit
Gas Expense $363
Cash $363
i. Paid $6,280 in wages to employees who worked in March.
Account Name Debit Credit
Wages Expense $6,280
Cash $6,280
j. Paid a $300 dividend from the corporation to EACH owner
Account Name Debit Credit
Retained Earnings $600
Cash $600
k. Purchased $50,000 of equipment (refrigerated display cases, cabinets, tables, and chairs) and renovated and decorated the new store for $20,000 (added to the cost of the building); paid cash.
Account Name Debit Credit
Equipment $50,000
Building $20,000
Cash $70,000
2)
a Cash flow from FINANCING ACTIVITIES
b Cash flow from INVESTING ACTIVITIES ($72,000) and Non-Cash Investing and Financing Activity ($288,000).
c Cash flow from FINANCING ACTIVITIES.
d Non-Cash OPERATING ACTIVITIES.
e Cash flow from OPERATING ACTIVITIES ($2,600); Non-Cash Operating Activity ($1,600).
f Cash flow from OPERATING ACTIVITIES
g Non-Cash OPERATING ACTIVITIES.
h Cash flow from OPERATING ACTIVITIES.
i Cash flow from OPERATING ACTIVITIES.
j Cash flow from FINANCING ACTIVITIES.
k Cash flow from INVESTING ACTIVITIES
In March 2014, Traveling Gourmet, Inc. had several transactions that affected its financial accounts. These transactions included receiving cash from shareholders, purchasing a store with a mortgage, borrowing money from a bank, purchasing supplies, catering events, selling food at the retail store, and making dividend payments. By analyzing these transactions, we can compute the ending balances for different accounts and prepare an income statement for the month.
To compute the ending balances for the various accounts, we need to track the cash inflows and outflows for each transaction. Here is a summary of the transactions and their effects on the accounts:
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Answer:
Real rate of return= 0.0418 = 4.18%
Explanation:
Giving the following information:
Nominal rate of return= 6.92%
Inflation rate= 2.74%
The inflation rate decreases the purchasing power of nominal money.
To calculate the real rate of return, we need to use the following formula:
Real rate of return= nominal rare of return - inflation rate
Real rate of return= 0.0692 - 0.0274
Real rate of return= 0.0418 = 4.18%
Question 1 Completion with Options:
A. used equipment
B. storage warehouse
C. land for future building site
D. new office furniture
E. apartment complex
F. new delivery truck
Answer:
1. The assets purchased in the current year that are eligible to be expensed under Section 179 assuming the cost does NOT exceed the limitations are:
A. used equipment
D. new office furniture
F. new delivery truck
2. $561,000 is the maximum to be expensed with an adjusted basis of 100% for MACRS
Explanation:
There is a maximum deduction of $1,050,000 under section 179. The section affords eligible taxpayers the opportunity to reduce their tax burden in the first year that they purchase eligible properties.
If this is on Odyssey then its Helping
Answer: See explanation
Explanation:
Based on the scenario in the question, the amount that the restaurant charge for the lunch excluding any tax will be calculated as:
= $15.40 × 100/(100 + 8)
= $15.40 × 100/108
= $1540/108
= $14.26
Sales tax will be:
= $15.40 × 8%
= $15.40 × 8/100
= $15.40 × 0.08
= $1.23
Answer:
Possible outcome of stock price at end of 6 months (0.5 years)
Outcome 1:
Stock price = 35
Strike price = 45
Payoff call = max{ST - K,0} = max{35-45,0} = 0
Present value =
PV = 0/(1+5%)^0.5 = 0
Outcome 2:
Stock price = 49
Strike price = 45
Payoff call = max{ST - K,0} = max{49-45,0} = 4
Present value =
PV = 4/(1+5%)^0.5 = 3.903
Probability of both outcomes = 0.5
Value of call option = 0.5*0 + 0.5*3.903 = 1.95
Short sale arbitrage opportunity:
Short the stock and buy a call option. Invest the proceeds at 5% for 6 months:
Short stock = +41.6
long call = -1.95
Proceeds = 41.6 - 1.95 = 39.65
Amount after 6 months = 39.65*(1+5%)^0.5 = 40.629
Case 1:
Stock price = 35
Payoff from long call = 0
Buy the stock at market price and close the short stock position = -35
Total payoff = 40.629 - 35 = 5.629
Case 2:
Stock price = 49
Payoff from long call = 49 - 45 = 4
Buy the stock from market price and close the short stock position = -49
Total payoff = 40.629 + 4 - 49 = -4.3708
Present value of payoff from both cases = (0.5*5.629 + 0.5*(-4.3708))/(1+5%)^0.5
= 1.2581/1.0246 = 1.2277
Arbitrage payoff = 1.2277
Answer:
The short sale proceeds in an arbitrage strategy is 1.2277
Explanation:
From the question given,
The Possible outcome of stock price at end of 6 months (0.5 years)
The Outcome is:
The Stock price = 35
The Strike price = 45
The Payoff call = max(ST - K,0) = max(35-45,0) = 0
The Present value = PV = 0/(1+5%)^0.5 = 0
The possible Outcome 2:
The Stock price = 49
The Strike price = 45
The Payoff call = max{ST - K,0} = max{49-45,0} = 4
The Present value =
PV = 4/(1+5%)^0.5 = 3.903
Then,
The Probability of both outcomes = 0.5
Value of call option = 0.5*0 + 0.5 x 3.903 = 1.95
Therefore, the Short sale arbitrage opportunity is:
The Short the stock and buy a call option.
Invest the proceeds at 5% for 6 months:
Short stock = +41.6
long call = -1.95
Proceeds = 41.6 - 1.95 = 39.65
Amount after 6 months = 39.65*(1+5%)^0.5 = 40.629
The Case 1:
Stock price = 35
Payoff from long call = 0
Buy the stock at market price and close the short stock position = -35
The Total payoff = 40.629 - 35 = 5.629
For Case 2:
Stock price = 49
Payoff from long call = 49 - 45 = 4
Buy the stock from market price and close the short stock position = -49
Total payoff = 40.629 + 4 - 49 = -4.3708
The Present value of payoff from both cases = (0.5*5.629 + 0.5*(-4.3708))/(1+5%)^0.5
= 1.2581/1.0246 = 1.2277
Then the Arbitrage payoff = 1.2277
B) Production-volume variance.
C) Total factory overhead variance.
D) Overhead efficiency variance.
E) Total overhead spending variance.
Answer: C. Total factory overhead variance
Explanation:
The difference between total factory overhead cost incurred during a period and the total standard factory overhead cost assigned to production of the period is the total factory overhead variance.
Flexible budget variance is the difference that occurs between the results that are gotten by the flexible budget model and the actual results gotten.
Production volume variance is the difference that occurs between the budgeted production volume for a particular company and the actual volume of goods produced.
The correct option is C.