BUSINESS COLLEGE

Park Co. is considering an investment that requires immediate payment of $27,215 and provides expected cash inflows of $8,400 annually for four years. Assume Park Co. requires a 8% return on its investments. 1-a. What is the net present value of this investment

Answers

Answer 1

Answer:

Answer:

the net present value is $606.64

Explanation:

The computation of the net present value is shown below:

But before that the present value of annual cash inflows is to be determined i.e.

Present value = annual cash flows × PVIFA(8%,4years)

= $8,400 × 3.3121

= $27,821.64

Now

Net present value = Present value of cash flows - initial investment

= $27,821.64 - $27,215

= $606.64

Hence, the net present value is $606.64

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California Surf Clothing Company issues 1,000 shares of $1 par value common stock at $32 per share. Later in the year, the company decides to repurchase 100 shares at a cost of $35 per share. Record the transaction if California Surf reissues the 100 shares of treasury stock at $37 per share. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answers

Answer:

Explanation:

The journal entry is shown below:

Cash A/c Dr $3,700

To Treasury Stock A/c $3,500

To Additional Paid in Capital A/c $200

(Being the reissued shares are recorded)

The computation is shown below:

For cash account:

= 100 shares × $37 per share

= $3,700

For Treasury Stock Account

= 100 shares × $35 per share

= $3,500

And, for Additional Paid in Capital Account

= $3,700 - $3,500

= $200

For reissued shares, we debited the cash account and credited the treasury stock and Additional Paid-in Capital account

On June 10, Marin Company purchased $8,400 of merchandise from Cullumber Company, on account, terms 3/10, n/30. Marin pays the freight costs of $380 on June 11. Goods totaling $500 are returned to Cullumber for credit on June 12. On June 19, Marin Company pays Cullumber Company in full, less the purchase discount. Both companies use a perpetual inventory system.Prepare separate entries for each transaction on the books of Cullumber Company

Answers

Answer:

Debit Credit

June 10 Accounts Receivables $8400

Merchandise $8400

June 12 Merchandise $500

Accounts Receivables $500

June 19 Cash 7663

Discount 237

Accounts Receivables $7900

Explanation:

Final answer:

The transactions in Cullumber's books include sales revenue, accounts receivable, sales returns and allowances, and finally a cash entry alongside sales discounts when Marin pays the balance due.

Explanation:

The transactions on the books of Cullumber Company would be recorded as follows:

On June 10, Marin Company purchases $8,400 worth of goods. In the books of Cullumber, this would be recorded as: Accounts Receivable - Marin Company $8,400andSales Revenue $8,400
On June 11, Marin pays freight costs of $380. This has no effect on the entries in the books of Cullumber Company.
On June 12, Goods totaling $500 are returned by Marin. This would be recorded as: Sales Returns and Allowances $500 and Accounts Receivable - Marin Company $500
On June 19, Marin pays off the balance less the purchase discount. The payment can be recorded as: Cash $7,621, Sales Discounts $279 and Accounts Receivable – Marin Company $7,900. The sales discount is (3% of $8400-$500) = $279.

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A construction company entered into a fixed-price contract to build an office building for $20 million. Construction costs incurred during the first year were $6 million and estimated costs to complete at the end of the year were $9 million. The company recognizes revenue over time according to percentage of completion. How much revenue and gross profit or loss will appear in the company’s income statement in the first year of the contract? (Enter your answer in whole dollars.)

Answers

Answer:

$2 million or $2,000,000

Explanation:

The computation of the revenue and gross profit or loss will appear in the company’s income statement in the first year is shown below:

= revenue recognized - cost incurred

The Total cost is

= $6 + $9

= $15

And, the revenue recognized is

= $6 ÷ $15 × $20

= $8

So, the gross profit is

= $8 - $6

= $2

hence, the gross profit is $2 million

The independent cases are listed below that includes all items relevant to operating activities: Case A Case B Case C Sales revenue $ 65,000 $ 55,000 $ 96,000 Cost of goods sold 35,000 26,000 65,000 Depreciation expense 10,000 2,000 26,000 Salaries and wages expense 5,000 13,000 8,000 Net income (loss) 15,000 14,000 (3,000) Accounts receivable increase (decrease) (1,000) 4,000 3,000 Inventory increase (decrease) 2,000 0 (3,000) Accounts payable increase (decrease) 0 2,500 (1,000) Salaries and wages payable increase (decrease) 1,500 (2,000) 1,000 Compute cash flows from operating activities using the direct method. (Amounts to be deducted should be indicated with a minus sign.) Case A Case B Case C Cash Collected from Customers Cash Payments to Suppliers Cash Payments for Salaries and Wages Net Cash Provided by Operating Activities $ 0 $ 0 $ 0

Answers

Answer:

Case A Case B Case C

Cash Collected from Customers $66,000 $51,000 $93,000

Cash Payments to Suppliers ($37,000) ($23,500) ($63,000)

Cash Payments for Salaries and Wages ($3,500) ($15,000) ($7,000)

Net Cash Provided by Operating Activities $25,500 $12,500 $23,000

Explanation:

Case A Case B Case C

Sales revenue 65,000 55,000 96,000

Cost of goods sold 35,000 26,000 65,000

Depreciation expense 10,000 2,000 26,000

Salaries and wages expense 5,000 13,000 8,000

Net income (loss) 15,000 14,000 (3,000)

Accounts receivable increase (decrease) (1,000) 4,000 3,000

Inventory increase (decrease) 2,000 0 (3,000)

Accounts payable increase (decrease) 0 2,500 (1,000)

Salaries and wages payable increase

(decrease) 1,500 (2,000) 1,000

Cash Collected from Customers = Sales revenue - Accounts receivable increase (decrease)

Cash Payments to Suppliers = Cost of goods sold + Inventory increase (decrease) + Accounts payable increase (decrease)

Cash Payments for Salaries and Wages = Salaries and wages expense - Salaries and wages payable increase

(decrease)

Assume that Corn Co. sold 8,000 units of Product A and 2,000 units of Product B during the past year. The unit contribution margins for Products A and B are $34 and $57, respectively. Corn has fixed costs of $378,000. The break-even point in units is

Answers

Answer:

9,792.75 units

Explanation:

The formula to compute the break even point in units is shown below:

Break even point in units = Fixed cost ÷ Weightage average Contribution margin per unit

where,

Fixed cost is $378,000

And, the Weightage average Contribution margin per unit is

= (Total contribution margin) ÷ (Total sales units)

= (8,000 units ×$34 + $2,000 × $57) ÷ (8,000 units + 2,000 units)

= ($272,000 + $114,000) ÷ (10,000 units)

= ($386,000) ÷ (10,000 units)

= $38.6 per unit

Now the break even point in units is

= $378,000 ÷ 38.6 per unit

= 9,792.75 units

The domestic demand and supply for sugar are Qd = 40,000 − 200P and QSD = 10,000 + 300P. The foreign supply is QSF = 20,000 + 100P. What is the total supply of sugar in the domestic market?