A hedger takes a long position in a futures contract on a commodity on November 1, 2012 to hedge an exposure on March 1, 2013. The initial futures price is $60. On December 31, 2012 the futures price is $61. On March 1, 2013 it is $64. The contract is closed out on March 1, 2013. What gain is recognized in the accounting year January 1 to December 31, 2013

Answers

Answer 1

Answer:

Answer:

Gain recognized = $3,000

Explanation:

Continuation is"Each contract is on 1, 000 units of the commodity."

Gain in accounting year Jan 1 to Dec 31, 2013 is the total gain the accounting year. Gain recognized = (Price on March 1, 2013 - Price on Dec 31, 2012) * Total Contract

Gain recognized = (64 - 61) * 1000

Gain recognized = 3 * 1000

Gain recognized = $3,000

Related Questions

Bylie Company has an old factory machine that cost $50,000. The machine has accumulated depreciation of $28,000. Bylie has decided to sell the machine. a) What entry would Bylie make to record the sale of the machine for $25,000 cash? b) What entry would Bylie make to record the sale of the machine for $15,000 cash?
Megan and Susan are roommates. They spend most of their time studying (of course), but they leave some time for their favorite activities: making pizza and brewing root beer. Megan takes 3 hours to brew a gallon of root beer and 2 hours to make a pizza. Susan takes 7 hours to brew a gallon of root beer and 5 hours to make a pizza.Megan's opportunity cost of making a pizza is ?a. 2/3 gallonb. 5/7 gallonc. 1 1/2 gallonsd. 1 2/5 gallonsof root beer, and Susan's opportunity cost of making a pizza is ?a. 2/3 gallonb. 5/7 gallonc. 1 1/2 gallonsd. 1 2/5 gallonsof root beer.Who has an absolute advantage in making pizza, and who has a comparative advantage in making pizza?
The following information pertains to Lightning Inc., at the end of the year:Credit Sales $75,000 Accounts Payable 13,900 Accounts Receivable 8,200 Allowance for Uncollectible Accounts $900 creditCash Sales 24,000 Lightning uses the percentage-of-credit-sales method and estimates 4% of sales are uncollectible. What is the ending balance of the allowance account after the year-end adjustment?$3,900$4,860$3,000$2,100
In April 2013, Sparkle Enterprises purchased the Crimson Mine at a cost of $18,000,000. The mine is estimated to contain 500,000 tons of ore with a residual value of $2,000,000 after mining operations are completed. During 2013, 120,000 tons of ore were removed from the mine and sold. In this situation: a. The book value of the mine is $16,000,000 at the end of 2013. b. The amount of depletion deducted from revenue during 2013 is $3,840,000. c. The amount of depletion deducted from revenue during 2013 is $2,000,000. d. The mine is classified as an intangible asset with in indefinite life and is not amortized.
Donnie Hilfiger has two classes of stock authorized: $1 par preferred and $0.01 par value common. As of the beginning of 2018, 300 shares of preferred stock and 3,100 shares of common stock have been issued. The following transactions affect stockholders' equity during 2018: March 1 Issue 1,100 shares of common stock for $33 per share. May 15 Purchase 400 shares of treasury stock for $26 per share. July 10 Reissue 200 shares of treasury stock purchased on May 15 for $31 per share. October 15 Issue 200 shares of preferred stock for $36 per share. December 1 Declare a cash dividend on both common and preferred stock of $0.80 per share to all stockholders of record on December 15. (Hint: Dividends are not paid on treasury stock.) December 31 Pay the cash dividends declared on December 1. Donnie Hilfiger has the following beginning balances in its stockholders' equity accounts on January 1, 2018: Preferred Stock, $300; Common Stock, $31; Additional Paid-in Capital, $67,000; and Retained Earnings, $26,000. Net income for the year ended December 31, 2018, is $9,900. Taking into consideration the beginning balances on January 1, 2018 and all the transactions during 2018, respond to the following for Donnie Hilfiger: Required: 1. Prepare the stockholders' equity section of the balance sheet as of December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.) 2. Prepare the statement of stockholders' equity for the year ended December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)

The operations manager at a chemical company that produces insecticide for use in commercial applications is attempting to set a safety stock level for a key ingredient that is used in their most powerful product. She believes that demand during lead time for this ingredient is normally distributed based on past data. In addition, she believes that future use is accurately depicted by these historical demand-duringlead-time data (in gallons): 55, 75, 75, 70, 80, 60, 50, 70, 60, and 85. She estimates the standard deviation of demand during the lead time to be 8.5 gallons. a. What is the average demand during the lead time for this key ingredient?
b. What is the safety stock they need to provide a 95% service level?
c. What is the order point the company should use?

Answers

Answer:

a) Average demand during the lead time = Sum of all the historical demand during lead time / Number of periods

= (55+75+75+70+80+60+50+70+60+85) / 10

= 680 / 10

= 68 gallons

b) Standard deviation of demand during lead time(\sigmadL) = 8.5 gallons

At 95% service level,value of Z = 1.65

Safety stock = Z(\sigmadL) = 1.65(8.5) = 14.03 gallons

c) Reorder point = Average demand during the lead time + Safety stock

= 68 + 14.03

= 82.03 gallons

Given this project and the requirement that the number of resources working on a task cannot be less than the number assigned to the task, answer the following question. What is the least amount of time that the project can be completed and how many resources are required to complete the work?a. 16 days, 7 workers
b. 7 days, 5 workers
c. 5 days, 7 workers
d. 8 days, 3 workers

Answers

Answer: c. 5 days, 7 workers

Explanation: With the project requirements provided, and with the least of number of resources working on the task not less than the number of those assigned to the task.

The least amount of time for the project to complete would be approximately 5 days, and the resources needed to complete the task would be approximately 7 workers.

JB Instruments is analyzing a proposed project. The company expects to sell 1,600 units, ±3 percent. The expected variable cost per unit is $220 and the expected fixed costs are $438,000. Cost estimates are considered accurate within a ±2 percent range. The depreciation expense is $64,000. The sales price is estimated at $647 per unit, ±2 percent. What is the sales revenue under the worst-case scenario?

Answers

Answer:

$984,061.12

Explanation:

The computation of sales revenue under the worst-case scenario is shown below:-

Sales revenue under the worst-case scenario = Quantity sold × Price

= (1,600 - 1,600 × 3%) × ($647 - $647 × 2%)

= (1,600 - 48) × ($647 - 12.94)

= 1,552 × 634.06

= $984,061.12

Therefore for computing the sales revenue under the worst-case scenario we simply applied the above formula.

The adjusted trial balance of Ryan Financial Planners appears below.RYAN FINANCIAL PLANNERS
Adjusted Trial Balance
December 31, 2014
Debit Credit
Cash $2,660
Accounts Receivable 2,140
Supplies 1,850
Equipment 15,900
Accumulated Depreciation-Equipment $ 3,975
Accounts Payable 3,310
Unearned Service Revenue 3,205
Common Stock 10,000
Retained Earnings 4,510
Dividends 1,000
Service Revenue 4,300
Supplies Expense 410
Depreciation Expense 2,420
Rent Expense 2,920
$29,300 $29,300

Using the information from the adjusted trial balance, you are to prepare for the month ending December 31:
1. An income statement.
2. A balance sheet.
3. A retained earnings statement.

Answers

Answer:

Income Statement

Service Revenue 4,300

Less :Supplies Expense 410

Gross Income 3,890

Less :Depreciation Expense 2,420

Less :Rent Expense (2,920)

Net Loss 1,450

Balance Sheet

Assets $

Non-Current Asset

Equipment (15,900-3,975) 11,925

Current Asset $

Cash 2,660

Accounts Receivable 2,140

Supplies 1,850

6,650

Total Asset 18,575

Common Stock 10,000

Retained Earnings 2,060

Liabilities

Current Liabilities $

Unearned Service Revenue 3,205

Accounts Payable 3,310

6,515

Total Equity and Liability 18,575

Retained Earning Statement $

Retained Earning (at beginning) 4,510

Dividend Paid (1,000)

Net Loss for the year (1,450)

Retained Earning (at Ending) 2,060

Explanation:

Income statement shows the profit or loss for the period by deducting all the expenses from the revenue. The net value from here transferred to retained earning in the balance sheet.

Balance sheet shows the financial position of the company. It contains assets, equity and liabilities balance.

Statement of retained earning shows the balance of retained earnings and adjust all the payments made to shareholders in the form of dividend and net profit or loss for the period.

Final answer:

The income statement shows a net loss of $1,450. The retained earnings statement is $2,060 after accounting for the net loss and dividends. The balance sheet shows a total of $18,575 in assets, $6,515 in liabilities, and $12,060 in stockholders equity.

Explanation:

We will first need to prepare the income statement, followed by the retained earnings statement, and finally the balance sheet.

1. Income Statement

Service Revenue: $4,300

Less Expenses:

Supplies Expense: $410

Depreciation Expense: $2,420

Rent Expense: $2,920

Total Expense: $5,750

Net Income (Service Revenue - Total Expense): -$1,450

2. Retained Earnings statement

Beginning Retained Earnings: $4,510

Add: Net Income: -$1,450

Less: Dividends: $1,000

Ending Retained Earnings: $2,060

3. Balance Sheet

Assets:

Cash: $2,660

Accounts Receivable: $2,140

Supplies: $1,850

Equipment: $15,900

Less: Accumulated Depreciation: $3,975

Total Assets: $18,575

Liabilities:

Accounts Payable: $3,310

Unearned Service Revenue: $3,205

Total Liabilities: $6,515

Stockholders Equity:

Common Stock: $10,000

Retained Earnings: $2,060

Total Stockholders Equity: $12,060

Total Liabilities and Stockholders Equity: $18,575

Learn more about Financial Statements here:

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Kenny, Inc., is looking at setting up a new manufacturing plant in South Park. The company bought some land six years ago for $7.7 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent facilities elsewhere. The land would net $10.5 million if it were sold today. The company now wants to build its new manufacturing plant on this land; the plant will cost $21.7 million to build, and the site requires $920,000 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project

Answers

Answer:

$33,120,000

Explanation:

Calculation for What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project

Using this formula

Proper Cash Flow Amount = (Expected Cost of Selling + Cost of Building Manufacturing Plant + Cost of Grading)

Let plug in the formula

Proper Cash Flow Amount = ($10,500,000 + $21,700,000 + $920,000)

Proper Cash Flow Amount = $33,120,000

Therefore the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project will be $33,120,000

You are the newly appointed sales manager of the Rock Record Company and have been charged with the task of increasing revenues. Your economics consultants have informed you that at present price and output levels, price elasticity of demand for your product is less than one. You should:

Answers

Answer:

Increase price.

Explanation:

Price elasticity is the degree of responsiveness of quantity demanded to changes in price. Ideally as price increases quantity demanded reduces. When prices reduce quantity demanded increases.

As a new manager of Rock Record company, if the economics consultants inform you the price elasticity is less than one it means quantity does not change with increase in price.

So price can be increased without a corresponding decrease in price. The goal of higher revenue can be achieved by increasing the product price.

Answer:

The correct answer is: increase prices.

Explanation:

Price elasticity refers to the changes in quantity demand after the change in price for a good or service. Elasticity is calculated by dividing the percentage in quantity demanded by the percentage change in price. If the result is equal or greater than one (1) the demand is elastic. If the result is lower than 1 the demand is inelastic.

Thus, in the case given, Rock Record Company has an inelastic price demand since it is lower than 1. It implies changes in price are unlikely to change the quantity demanded. As the company needs to increase the revenue, the easiest method to achieve that is to raise the product prices.

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Edward leaves an organization for three years to fulfill military duties. Which observation is true of his employer's obligation to reemploy Edward under the Uniformed Services Employment and Reemployment Rights Act?A) The employer is not obligated to reemploy Edward.B) The employer must reemploy Edward with the same seniority and status he would have earned if his employment had not been interrupted.C) The employer must reemploy Edward but is exempted from providing him any fringe benefits or retirement benefits.D) The employer must implement an early retirement incentive program for Edward.E) The employer must reemploy Edward with a lower pay scale to compensate for his absence.

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At the end of business on September 1, the total displayed on the cash register tape shows $1,059 of cash sales for the day. However, when the clerk and the supervisor count the cash in the register, the count reveals that $1,050 was actually collected from customers. Required:Write down the journal entry.