Windsor Hospital purchases $90,000 in surgical equipment on October 1, Year 1. The useful life is estimated to be 5 years, and t

Answer:

Details on Costs and Revenue associated with the new CD

e. None of the alternatives given

Explanation:

a) Data and Calculations:

Variable expenses:

Direct materials and labor:    $2.50/CD

Royalties for songwriters:          $0.70/CD

Royalties for recording artists: $2.00/CD

Overall variable cost                     $5.20/CD

Price for CD Distributor: $10.00/CD

Contribution margin                       $4.80/CD

Fixed Costs:

Costs for advertising & promotion:           $380,000

Overhead for Sony Records Inc.: $300,000

Total fixed expenses                         $680,000

To find the break-even point = Total fixed costs/Contribution per unit

= $680,000/$4.8 = 142,000 CDs

Given that they have sold 100,000 CDs

The increase is 42,000 (142,000 - 100,000)

This growth represents a 42% change = (42,000/100,000 * 100)

The shift in sales from 100,000 to 142,000 CDs required to reach break-even is a 42% increase.  None of the available choices from a to d provide the correct answer.

Answer: The result is -2.42

Explanation:

P1 = $4 Q1 = 800

P2 = $4.50 Q2 = 600

Applying the midpoint formula, we calculate:

For price:

P2 - P1/(P2 + P1)/2

= 4.5 - 4/(4.5 + 4)/2

= 0.5/4.25

= 0.12

For quantity:

Q2 - Q1/(Q2 + Q1)/2

= 600 - 800/(600 + 800)/2

= -200/700

= -0.29

The price elasticity of demand is calculated as change in quantity/change in price

= -0.29/0.12

= -2.42.

Response:

A.

Dec. 28, 20Y3

Dr Accounts Receivable - Beasley Co. 18,500

Cr Sales Revenue 18,500

Dec. 28, 20Y3

Dr Cost of Goods Sold 11,200

Cr Inventory 11,200

B.

Jan. 3, 20Y4

Dr Sales Returns and Allowances 4,000

Cr Accounts Receivable - Beasley Co. 4,000

Jan. 3, 20Y4

Dr Inventory 2,350

Cr Cost of Goods Sold 2,350

C. Jan. 7, 20Y4

Dr Cash 14,210

Dr Sales Discount 290

Cr Accounts Receivable - Beasley Co. 14,500

Explanation:

A. Recording the entry for the sale on December 28, 20Y3, using a perpetual inventory system’s net method.

Dec. 28, 20Y3

Dr Accounts Receivable - Beasley Co. 18,500

Cr Sales Revenue 18,500

Dec. 28, 20Y3

Dr Cost of Goods Sold 11,200

Cr Inventory 11,200

B. Journals to record the returns of merchandise

Jan. 3, 20Y4

Dr Sales Returns and Allowances 4,000

Cr Accounts Receivable - Beasley Co. 4,000

Jan. 3, 20Y4

Dr Inventory 2,350

Cr Cost of Goods Sold 2,350

C. Journal entry to document the receipt of amount owed

Jan. 7, 20Y4

Dr Cash 14,210

[(18,500-4,000)-(18,500-4,000)*2% ]

Dr Sales Discount 290

[(18,500-4,000)*2% ]

Cr Accounts Receivable - Beasley Co. 14,500

(18,500-4,000)

Response:

Lonnie Holdiman Co.

A Schedule calculating the adjusted income prior to taxes for 2020 and 2021:

2020 2021

Income before taxes $101,000 $77,400

1. Excess Sales revenue (38,200) 38,200

2. Inventory understated as of December 31, 2020 8,640 (8,640)

3. Discount on amortized bonds not accounted for (1,776) (1,901)

4. Equipment repairs not accounted for (8,500) (9,400)

5. Overstated depreciation from capitalized equipment repairs 850 940

Corrected income before tax $62,014 $96,599

Clarification:

a) Data and Calculations:

Income before tax for 2020 = $101,000

Income before tax for 2021 = $77,400

1. Sales Revenue 2020 $38,200; 2021 Sales Revenue $38,200

2. Understated inventory for 2020 $8,640; 2021 $8,640

3. Unrecorded interest expense on bonds for 2020 $1,776

Interest expense on bonds for 2021 $1,901

4. Unrecorded equipment repairs 2020 $8,500 falsely recorded to Equipment account $8,500

Equipment repairs 2021 $9,400 misclassified to Equipment account $9,400

5. Overstated depreciation expense for 2020 $850

Overstated depreciation expense for 2021 $940.

Bond Calculations:

Outstanding bond value:

Face value of the bond = $250,000

Discount = 15,000

Bond proceeds = $235,000

Bond interest payment = $15,000 ($250,000 * 6%)

Bond interest expense = $16,450 ($235,000 * 7%)

Amortized discount = $1,450

On December 31, 2017:

Bond interest payment = $15,000 ($250,000 * 6%)

Bond interest expense = $16,450 ($235,000 * 7%)

Amortized discount = $1,450 ($16,450 - $15,000)

Outstanding value = $236,450 ($235,000 + 1,450)

On December 31, 2018:

Bond interest payment = $15,000 ($250,000 * 6%)

Bond interest expense = $16,552 ($236,450 * 7%)

Amortized discount = $1,552 ($16,552 - $15,000)

Outstanding value = $238,002 ($236,450 + 1,552)

On December 31, 2019:

Bond interest payment = $15,000 ($250,000 * 6%)

Bond interest expense = $16,660 ($238,002 * 7%)

Amortized discount = $1,660 ($16,660 - $15,000)

Outstanding value = $239,662 ($238,002 + 1,660)

On December 31, 2020:

Bond interest payment = $15,000 ($250,000 * 6%)

Bond interest expense = $16,776 ($239,662 * 7%)

Amortized discount = $1,776 ($16,776 - $15,000)

Outstanding value = $241,438 ($239,662 + 1,776)

On December 31, 2021:

Bond interest payment = $15,000 ($250,000 * 6%)

Bond interest expense = $16,901 ($241,438 * 7%)

Amortized discount = $1,901 ($16,901 - $15,000)

Outstanding value = $243,339 ($241,438 + 1,901)

Depreciation on Capitalized Equipment Repairs:

Excess depreciation expense:

For 2020 = $850 ($8,500 * 10%)

For 2021 = $940 ($9,400 * 10%)

A leader characterized by high initiating structure is likely to engage in the following behaviors;

<span>·         </span>Regarding deadlines, the leader will most probably stress the importance of adhering to these timelines

<span>·         </span>The leader is expected to hold their employees accountable for maintaining specific performance standards