Lakiesha is an employee who drives a 2017 Buick Verano as a company car. The fair-market value of the car is $28,545. She has be

Answer:

$139,000

Explanation:

The calculation for the retained earnings as of December 31, 2019 is outlined below:

= Beginning retained earnings + yearly depreciation + net income - cash dividends paid

= $60,000 + $12,000 + $100,000 - $33,000

= $139,000

The annual depreciation is calculated as

= $1,000 × 12 months

= $12,000

Essentially, we utilized the formula above to find the final balance

Response:

A. Payback Period

• The payback period is calculated to be 2.875 years, hence the project is deemed acceptable since this period is under the 3-year limit.

B. Internal Rate of Return (IRR)

• With an IRR of 22.69%, the project should be pursued as this rate exceeds the minimum required return of 8%.

C. Simple Rate of Return

• The simple rate of return is 18%, indicating the project should be accepted since it surpasses the required return rate.

D. Net Present Value

• The NPV is calculated at $4,647.85, thus the project should be approved as the NPV is greater than zero.

Clarification:

Year Cash Flow

0 -$10,000

1 $2,400

2 $4,800

3 $3,200

4 $3,200

5 $2,800

6 $2,400

Discount Rate 8%

I employed a financial calculator to find both the NPV and IRR.

Payback period is determined as follows: $10,000 - $2,400 - $4,800 = $2,800 / $3,200 = 0.875

Thus, the payback period is 2.875 years

For simple rate of return:

Average cash flow = ($2,400 + $4,800 + $3,200 + $3,200 + $2,800 + $2,400) / 6 = $3,467

Annual depreciation expense = $10,000 / 6 = $1,667

Simple rate of return = ($3,467 - $1,667) / $10,000 = 18%

Answer:

a. Nov 11, 2017

Dr Cash $4,900

Cr Sales $4,900

Nov 30, 2017

Dr Warranty Expense $294

Cr Estimated Warranty Liabilities $294

Dec 9, 2017

Dr Estimated Warranty Liabilities $196

Cr Cash $196

Dec 16, 2017

Dr Cash $14,700

Cr Sales $14,700

Dec 29, 2017

Dr Estimated Warranty Liabilities $392

Cr Cash $392

Dec 31, 2017

Dr Warranty Expense $882

Cr Estimated Warranty Liabilities $882

b. Jan 5, 2018

Dr Cash $9,800

Cr Sales $9,800

Jan 17, 2018

Dr Estimated Warranty Liabilities $462

Cr Cash $462

Dec 31, 2018

Dr Warranty Expense $588

Cr Cash $588

Explanation:

a. Preparation of the journal entries to record the transactions and adjustments for 2017

Nov 11, 2017

Dr Cash $4,900

Cr Sales $4,900

(This records the sale of razors for cash)

Nov 30, 2017

Dr Warranty Expense $294

Cr Estimated Warranty Liabilities $294

($4,900*6%)

(This records the warranty expense)

Dec 9, 2017

Dr Estimated Warranty Liabilities $196

Cr Cash $196

(14 razors*14)

(This represents the replacement of 14 razors)

Dec 16, 2017

Dr Cash $14,700

Cr Sales $14,700

(This records the cash sale of razors)

Dec 29, 2017

Dr Estimated Warranty Liabilities $392

Cr Cash $392

(28 razors*14)

(This represents the replacement of 28 razors)

Dec 31, 2017

Dr Warranty Expense $882

Cr Estimated Warranty Liabilities $882

($14,700*6%)

(This records warranty expense)

b. Preparation of journal entries to reflect the transactions and adjustments for 2018

Jan 5, 2018

Dr Cash $9,800

Cr Sales $9,800

(This records razors sold for cash)

Jan 17, 2018

Dr Estimated Warranty Liabilities $462

Cr Cash $462

(33 razors*14)

(This indicates the replacement of 33 razors)

Dec 31, 2018

Dr Warranty Expense $588

Cr Cash

(6%*$9,800) $588

(This indicates the recording of warranty expense)

Answer:

Explanation:

A)

The formula for regression is,

ln(Cell Phone Subscribers) = -820.894 + 0.411704 Year

or,

Percentage of Cell Phone Subscribers = exp(-820.894 + 0.411704 Year)

For the year 2005,

Percentage of Cell Phone Subscribers = exp(-820.894 + 0.411704 * 2005)

= 96.79%

B)

The significance of the slope has a p-value close to 0 (0.000). Hence, the model holds statistical significance and its predictions are very reliable.