During Year 1, Hardy Merchandising Company purchased $20,000 of inventory on account. Hardy sold inventory on account that cost $15,000 for $22,500. Cash payments on accounts payable were $12,500. There was $20,000 cash collected from accounts receivable. Hardy also paid $4,000 cash for operating expenses. Assume that Hardy started the accounting period with $18,000 in both cash and common stock.
Required:
a. Record the events in a horizontal statement model.
b. What is the balance of accounts recelvable at the end of 2018?
c. What is the balance of accounts payable at the end of 2018?
d. What are the amounts of gross margin and net income for 2018?
Answers
Answer:
[b] = $ 2500
[c] = $ 7500
[d] = Gross margin = 22500 – 15000 = $ 7500
Net Income = 7500 – 4000 = $ 3500
[e] = $ 3500
Explanation:
Here the solution is given as follows,
Related Questions
XYZ Co. reported the following results for October: Sales $ 32,000 Cost of goods sold (all variable) $ 6,000 Total variable selling expense $ 2,500 Total fixed selling expense $ 4,700 Total variable administrative expense $ 1,800 Total fixed administrative expense $ 3,000 The contribution margin for October is:
Answers
Answer:
See below
Explanation:
Given the information above,
Contribution margin = Sales - Variable expenses
Sales = $32,000
Variable expenses = Total variable selling expenses + Total variable administrative expenses
= $2,500 + $1,800
= $4,300
Therefore,
Contribution margin = $32,000 - $4,300
Contribution margin = $27,700
Therefore, the contribution margin for October is $27,700
Classical economists believed that: _________
a) budget deficits and surpluses were necessary for the control of economic fluctuations.
b) market economies are inherently unstable because of fluctuating aggregate demand.
c) market economies suffer prolonged periods of recessions and depressions.
d) price flexibility automatically directs market economies to full employment
Answers
Answer:
the answer is D
Explanation:
The stock brokerage firm of Blank, Leibowitz, and Webber has analyzed and recommended two stocks to an investor. The investor was interested in factors such as short-term growth, intermediate growth, and dividends rates. The data on each stock is as follows: STOCK ($) FACTOR LOUISIANA GAS AND POWER TRIMEX INSULATION COMPANY Short-term growth potential, per dollar invested 0.36 0.24 Intermediate growth potential (over next 3 years), per dollar invested 1.80 1.50 Dividend rate potential 4% 8%The investor has the following goals: an appreciation of no less than $720 in the short term, an appreciation of at least $5000 in the next three years, and a dividend income of at least $200 per year. What is the smallest investment the investor can make to meet these three goals.
Answers
A lower inflation rate will decrease the after-tax real interest rate when the government taxes nominal interest income.
a. True
b. False
Answers
False, SHOULD INCREASE after-tax real interest rates.
The government sector balance is equal to net taxes ________ government expenditure on goods and services. If that number is ________, a government sector surplus is lent to other sectors; if that number is ________, borrowing from other sectors must finance a government deficit.
Answers
Answer:
less
positive
negative
Explanation:
The government sector balance is income from taxes less government spending
Government sector deficit occurs when government spending exceeds income of the government.
When deficit increases, debt increases. This is because a deficit would need to be funded by additional borrowing
When there is a surplus, government spending is less than the income of the government. Government is able to lend to other sectors
1. Managerial Internal (Inside) accounting information reports are generally prepared for A) Stockholders or Shareholders B) Creditors, Lenders, or Banks C) Managers. D) Regulatory Agencies, like the IRS or SEC
Answers
Answer:
C) Managers
Explanation:
Managerial accounting is the accounting that concern with the information received via financial accounting inside the organization. The accouting reports that could be applied for planning, decision making and measuring the performance of the company
So if the managerial accounting information reports are prepared internally so it is for the managers to analyze the overall performance of the organization
Hence, the option c is correct
Standish Company manufactures consumer products and provided the following information for the month of February:
Units produced 131,000
Standard direct labor hours per unit 0.20
Standard fixed overhead rate (per direct labor hour) $2.50
Budgeted fixed overhead $65,000
Actual fixed overhead costs $68,300
Actual hours worked 26,350
Required:
a. Calculate the fixed overhead spending variance using the formula approach.
b. Calculate the volume variance using the formula approach.
Answers
Answer and Explanation:
The computation is shown below:
a. Fixed overhead Spending Variance is
= Budgeted Fixed Overhead - Actual Fixed overhead
= $65000 - $68300
= - $3300 (unfavorable)
b.
Fixed Overhead Volume Variance is
= (131000 × 0.20 × $2.50) - $65000
=$65500 - $65000
= $500 Favorable
In this way these can be determined
On January 1, 2021, Badger Inc. adopted the dollar-value LIFO method. The inventory cost on this date was $101,600. The ending inventory, valued at year-end costs, and the relative cost index for each of the next three years is below:
Year-end Ending inventory at year-end costs Cost Index
2021 $131,040 1.05
2022 150,040 1.10
2023 160,320 1.20
In determining the inventory balance for Badger to report in its 12/31/2022 balance sheet: _____________-
a. An additional layer of $12,760 is added to the 12/31/2021 balance.
b. An additional layer of $24,760 is added to the 12/31/2021 balance.
c. An additional layer of $23,760 is added to the 12/31/2021 balance.
d. None of these answer choices are correct.
Answers
Answer:
a. An additional layer of $12,760 is added to the 12/31/2021 balance.
Explanation:
The computation of the inventory balance is given below:
2021 Base year cost is
= $131,040 ÷ 1.05
= $124,800
Additional layer is
= $124,800 - $101,600
= $23,200
2022 Base year cost is
= $150,040 ÷ 1.10
= $136,400
Additional layer is
= ($136,400 - $124,800 ) × 1.10
= $11,600 1.10
= $12,760
Therefore the first option is correct
Precision Construction entered into the following transactions during a recent year.
January 2 Purchased a bulldozer for $250,000 by paying $20,000 cash and signing a $230,000 note due in five years.
January 3 Replaced the steel tracks on the bulldozer at a cost of $20,000, purchased on account. The new steel tracks increase the bulldozer's operating efficiency.
January 30 Wrote a check for the amount owed on account for the work completed on
February 1 Replaced the seat on the bulldozer and wrote a check for the full $800 cost.
March 1 Paid $3,600 cash for the licensing rights to use computer software for a two-year period.
Required:
Prepare the journal entries for each of the above transactions.
Answers
Answer:
Jan-02
Dr Bulldozer $ 250,000
Cr Cash $ 20,000
Cr Note Payable $ 230,000
Jan-03
Dr Bulldozer $ 20,000
Cr Accounts Payable $ 20,000
Jan-30
Dr Accounts Payable $ 20,000
Cr Cash $ 20,000
Feb-01
Dr Repair and Maintenance Expense $ 800
Cr Cash $ 800
Mar-01
Dr Computer Software $ 3,600
Cr Cash $ 3,600
Explanation:
Preparation of the journal entries for each of the above transactions.
Jan-02
Dr Bulldozer $ 250,000
Cr Cash $ 20,000
Cr Note Payable $ 230,000
(Purchased bulldozer)
Jan-03
Dr Bulldozer $ 20,000
Cr Accounts Payable $ 20,000
(Replaced tracks on bulldozer)
Jan-30
Dr Accounts Payable $ 20,000
Cr Cash $ 20,000
(Paid cash)
Feb-01
Dr Repair and Maintenance Expense $ 800
Cr Cash $ 800
(Repaired seat of bulldozer)
Mar-01
Dr Computer Software $ 3,600
Cr Cash $ 3,600
(Purchase computer software)
The board of commissioners of the City of Hartmoore adopts a general fund budget for the year ending June 30, 2020. It includes revenues of $1,530,000, bond proceeds of $402,500, appropriations of $1,100,000, and operating transfers out of $502,500. If this budget is formally integrated into the accounting records, what journal entry is required at the beginning of the year? What later entry is required?
Answers
Solution :
Estimated revenues = $1,530,000
Other financing sources - bond proceeds = $402,500
Appropriations = $1,100,000
Est other fin uses = $502,500
Budgetary fund balance = $195,000
Appropriations = $1,100,000
Est other fin uses = $502,500
Budgetary fund balance = $195,000
Est Rev = $1,530,000
Other fin sources bond proceeds = $402,500
A firm with earnings before interest and taxes of $500,000 needs $1 million of additional funds. If it issues debt, the bonds will mature after 20 years and pay interest of 8 percent. The firm could issue preferred stock with a dividend rate of 8 percent. The firm has 100,000 shares of common stock outstanding and is in the 30 percent income tax bracket. What are the (1) earnings per common share under the two alternatives, (2) the times-interest-earned if the firm uses debt financing, and (3) the times-dividend-earned if the firm uses preferred stock financing
Answers
Answer:
Calculation of Earning Per Share
Particulars Debt Alternative($) Preferred Stock($)
Amount Required 1,000,000 1,000,000
Earning before Interest and Tax 500,000 500,000
Less: Interest Cost(8%) 80,000 ----
Earning After Interest 420,000 500,000
Tax(30%) 126,000 150,000
Earning After Tax 294,000 350,000
Less: Dividend to Pref. Shares 80,000
Earning Avai. for C. Stockholders 294,000 270,000
Outstanding shares 100,000 100,000
Earning Per Common Share 2.94 2.70
2. Times Interest Earned Ratio = EBIT / Interest
Times Interest Earned Ratio = 500,000 / 80,000
Times Interest Earned Ratio = 6.25 Times
3. Times Dividend Earned Ratio = Net Income / Preferred Dividend
Times Dividend Earned Ratio = 350,000 / 80,000
Times Dividend Earned Ratio = 4.375 Times
A company has two segments with total sales of $500,000 and total variable costs of $343,750. Traceable fixed expenses are $50,000 and common fixed expenses are $80,000. The break even in dollars for the company as a whole equals $ _______. (Enter your answer as a whole number.)
Answers
Answer:
$416,000
Explanation:
The computation of the break even in dollars for the company is given below:
Total fixed expenses = Traceable fixed expenses + Common fixed expenses
= $50,000 + $80,000
= $130,000
Now
Contribution margin ratio = (Sales - Variable costs) ÷Sales × 100
= ($500,000 - $343,750) ÷ $500,000 × 100
= 31.25%
Now
Break-eve dollars = Fixed expenses ÷ Contribution margin ratio
= $130,000 ÷ 31.25%
= $416,000
Supply is more elastic over long periods than over short periods because:_____.
a. producers can make more adjustments in the long run than in the short run.
b. consumers can make fewer adjustments in the long run than in the short run.
c. producers can make fewer adjustments in the long run than in the short run.
d. consumers can make more adjustments in the long run than in the short run.
Answers
Answer:
A
Explanation:
Price elasticity of supply measures the responsiveness of quantity supplied to changes in price of the good.
Price elasticity of supply = percentage change in quantity supplied / percentage change in price
If the absolute value of price elasticity is greater than one, it means supply is elastic. Elastic supply means that quantity supplied is sensitive to price changes.
Supply is inelastic if a small change in price has little or no effect on quantity supplied. The absolute value of elasticity would be less than one
The short run is a period where all factors of production are fixed. In the short run, a firm would continue to produce if price is above average variable cost. If this is not the case, it would shut down
The long run is a period where all factors of production are varied. It is known as the planning time for a company
Supply is more elastic in the long run than in the short run because the producer can make adjustments in the long run
A company plans on selling 500 units. The selling price per unit is $10. There are 60 units in beginning inventory, and the company would like to have 100 units in ending inventory. How many units should be produced for the coming period?
a. 540 units
b. 2,000 units
c. 2,035 units
d. 365 units
e. 400 units
Answers
This may also be asked as "Why are you looking for a job?" This question can make the most seasoned interviewee squirm a little because of the first word; why. A question starting with "why" immediately places you on the defensive.
Answers
Answer:
Starting a question in a job interview with the word "why" can be a little intimidating and put even a more experienced interviewee on the defensive because communication has been established directly, which occurs when the sender conveys the main message of clearly and objectively, and when it is asked in the form of a question, such as in a job interview, this can generate increased expectations and consequently put a candidate on the defensive, which can make the interviewer not able to actually capture the real motivation of the candidate in the interview.
In order for a job interview to be effective, and for the best candidate to be selected for the job vacancy, it is necessary that it be carried out indirectly, with the interviewer being cordial and not intimidating, gaining the candidate's trust and the make you feel comfortable and safe to share your professional experiences and demonstrate your personality more spontaneously.
George has been selling 8,000 T-shirts per month for $8.00. When he increased the price to $9.00, he sold only 7,000 T-shirts.
Which of the following best approximates the price elasticity of demand?
A. -1.2467
B. -1.02
C. -0.5667
D. -1.1333
Suppose George's marginal cost is $3 per shirt.
Before the price change, George's initial price markup over marginal cost was approximately
A. 0.5625
B. 0.375
C. 0.625
D. 0.6875
George's desired markup is?
A. 1.3235
B. 0.7941
C. 0.9706
D. 0.8824
Since George's initial markup, or actual margin, was (LESS OR GREATER) than his desired margin, raising the price was (PROFITABLE OR NOT PROFITABLE).
Answers
Answer:
a. The best approximates the price elasticity of demand is -1.1333. Therefore, the correct option is D. -1.1333.
b. George's Initial price markup over marginal cost = 0.625. Therefore, the correct option is C. 0.625.
c. George's desired markup = 0.8824. Therefore, the correct option is D. 0.8824.
d. Since George's initial markup, or actual margin, was LESS than his desired margin, raising the price was PROFITABLE.
Explanation:
a. Which of the following best approximates the price elasticity of demand?
Price elasticity of demand = Percentage change in quantity demanded / Percentage change in price ................ (1)
Where, based on the midpoint formula, we have:
Percentage change in quantity demanded = {(New quantity demanded – Old quantity demanded) / [(New quantity demanded + Old quantity demanded) / 2]} * 100 = {(7000 - 8000) / [(7000 + 8000) / 2]} * 100 = -13.3333333333333%
Percentage change in price = {(New price - Old price) / [(New price + Old price) / 2]} * 100 = {(9 - 8) / [(9 + 8) / 2]} * 100 = 11.7647058823529%
Substituting the values into equation (1), we have:
Price elasticity of demand = -13.3333333333333% / 11.7647058823529% = -1.13333333333333
Approximated to 4 decimal places, we have:
Price elasticity of demand = -1.1333
This implies that the best approximates the price elasticity of demand is -1.1333.
Therefore, the correct option is D. -1.1333.
b. Suppose George's marginal cost is $3 per shirt. Before the price change, George's initial price markup over marginal cost was approximately.
George's Initial price markup over marginal cost = (Initial selling price - marginal cost) / Initial selling price = ($8 - $3) / $8 = 0.625
Therefore, the correct option is C. 0.625.
c. George's desired markup is?
George's desired markup = 1 / Absolute value of price elasticity of demand BEFORE approximation to 4 decimal places = 1 / 1.13333333333333 = 0.88235294117647
Approximated to 4 decimal places, we have:
George's desired markup = 0.8824
Therefore, the correct option is D. 0.8824
d. Since George's initial markup, or actual margin, was (LESS OR GREATER) than his desired margin, raising the price was (PROFITABLE OR NOT PROFITABLE).
George's Initial price markup over marginal cost = 0.625
George's desired markup = 0.8824
Therefore, we have:
Since George's initial markup, or actual margin, was LESS than his desired margin, raising the price was PROFITABLE.
Classify each person as employed, unemployed, or not in the labor force.
a. Latasha is a former police officer who was laid off after cuts to the city budget. After searching unsuccessfully for a full-time position, she took a part-time job as a security guard and worked nine hours last week.
b. Susan is a former police officer who was laid off after cuts to the city budget. After searching unsuccessfully for a full-time position, she took a part-time job as a security guard and worked nine hours last week.
c. Kate lost her job as a real estate agent six months ago. She became so frustrated with her inability to find work that she stopped looking for work altogether seven weeks ago.
d. Becky lost her job as a port security officer last month after the city decided to shut down the docks. She has yet to find a job, but she interviewed for a position a few days ago
Answers
Answer:
employed
employed
not part of the labour force
unemployed
Explanation:
A person is classified as unemployed if the person is without a job but has searched for employment within the past four weeks or the person is set to resume a job within the next three months
Becky is unemployed because she is without a job and has interviewed for a position a couple of days ago, She is frictionally unemployed
Frictional unemployment is the period of time a person is unemployed from the period he leaves his current job and the time he gets another job.
Kate is a discouraged worker. Discouraged workers are not included in the labour force.
A discouraged worker is a person who is within the legal employment age but is without a job and has given up on searching for employment
A person is considered employed if the person is working for some form of remuneration
Air Destinations issues bonds due in 10 years with a stated interest rate of 11% and a face value of $500,000. Interest payments are made semi-annually. The market rate for this type of bond is 12%. Using present value tables, calculate the issue price of the bonds
Answers
Answer: $471,324.61
Explanation:
Price of a bond = Present value of coupon payments + Present value of face value at maturity
Coupon payments = 500,000 * 11% * 1/2 years = $27,500
Periodic yield = 12%/ 2 = 6% per semi annual period
Periods = 10 * 2 = 20 semi annual periods
Coupon payment is constant so it is an annuity.
Price of bond = Present value of annuity + Present value of face value at maturity
= (Annuity * Present value interest factor of Annuity, 6%, 20 years) + Face value / (1 + rate) ^ number of periods
= (27,500 * 11.4699) + 500,000 / (1 + 6%)²⁰
= $471,324.61
Which of the following are required for a capacity calculation (choose all that apply)?
a. Time between process starts.
b. Time between process completions.
c. Total Time spent in the process
d. Length of the time horizon in question
Answers
Answer:
• time between process starts.
• time between process completions
• length of the time horizon in question
Explanation:
Capacity utilisation refers to the measure of the extent of the usage of the productive capacity of a business. It is the percentage of total capacity which is being achieved in a particular period.
Based on the options given, the ones required for capacity utilization include the time between process starts, the time between process completions and the length of the time horizon in question.
Which of the following statements are true regarding technology, gaming, and gambling? #1. Rapid-play poker machines have increased the number of problem and pathological gamblers. #2. Online gambling has resulted in an increased number of problem and pathological gamblers. #3. There is no evidence that technology has led to an increase in the number of people with gambling or gaming addictions. #4. Electronic media is a breeding ground for new addictions, such as Internet, video games, texting, and multiplayer games.
Answers
Answer:
1. Rapid-play poker machines have increased the number of problem and pathological gamblers.
2. Online gambling has resulted in an increased number of problem and pathological gamblers.
4. Electronic media is a breeding ground for new addictions, such as Internet, video games, texting, and multiplayer games.
Explanation:
The true statements regarding technology, gaming, and gambling include:
1. Rapid-play poker machines have increased the number of problem and pathological gamblers.
2. Online gambling has resulted in an increased number of problem and pathological gamblers.
4. Electronic media is a breeding ground for new addictions, such as Internet, video games, texting, and multiplayer games.
It should be noted that there are several betting companies nowadays and this has led to more people to be involved in gambling.
What is the IRR, assuming an industrial building can be purchased for $250,000 and is expected to yield cash flows of $18,000 for each of the next five years and be sold at the end of the fifth year for $280,000
Answers
Answer:
9.2%
Explanation:
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested
IRR can be calculated with a financial calculator
Cash flow in year 0 = $-250,000
Cash flow in year 1 = $18,000
Cash flow in year 2 = $18,000
Cash flow in year 3 = $18,000
Cash flow in year 4 = $18,000
Cash flow in year 5 = $18,000 + $280,000
IRR = 9.2%
To determine IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
A study has been conducted to determine if one of the departments in Mary Company should be discontinued. The contribution margin in the department is $50,000 per year. Fixed expenses charged to the department are $65,000 per year. It is estimated that $40,000 of these fixed expenses could be eliminated if the department is discontinued. These data indicate that if the department is discontinued, the company's overall net operating income would: Group of answer choices
Answers
Answer:
It is better to continue
Explanation:
Did my research
Sports Corp has 11.7 million shares of common stock outstanding, 6.7 million shares of preferred stock outstanding, and 2.7 million bonds. If the common shares are selling for $26.7 per share, the preferred share are selling for $14.2 per share, and the bonds are selling for 96.83 percent of par, what would be the weight used for common stock in the computation of Sports's WACC
Answers
Answer: 10.34%
Explanation:
First calculate the value of the company's total capital:
= Common stock + Preferred stock + Debt
= (11,700,000 * 26.70) + (6,700,000 * 14.20) + (2,700,000 * 96.83/100 * 1,000 par value)
= $3,021,940,000
The weight to be used for common stock is:
= Common stock value / Total capital value
= (11,700,000 * 26.70) / 3,021,940,000
= 312,390,000 / 3,021,940,000
= 10.34%
Randel Manufacturing has five activity cost pools and two products (a budget tape vacuum and a deluxe tape vacuum). Information is presented below:
Cost Drivers by Product Activity Cost Pool Ordering and Receiving Machine Setup Machinine Assembly Inspection Cost Driver Estimated Overhead Budget Deluxe $130,000 Orders Setups Machine hours Parts 400 400 150,000 100,000 600 297,000 500 1,000,000 600,000 1,200,000 800,000 300,000 550 450
Compute the overhead cost per unit for each product. Production is 700,000 units of Budget and 200,000 units of Deluxe. (Round overhead cost per unit to 2 decimal places, eg. 12.25 and cost assigned to O decimal places, eg. 2,500)
Overhead cost per unit
Budget S per unit
Deluxe $ per unit
Answers
Answer:
Randel Manufacturing
Overhead cost per unit
Budget $2.81 per unit
Deluxe $6.80 per unit
Explanation:
a) Data and Calculations:
Cost Drivers by Product
Activity Cost Pool Cost Driver Estimated Budget Deluxe
Overhead
Ordering and Receiving Orders $130,000 600 400
Machine Setup Setups 297,000 500 400
Machining Machine hours 1,000,000 150,000 100,000
Assembly Parts 1,600,000 1,200,000 800,000
Inspection Inspections 300,000 550 450
Cost Pool Overhead Rates
Ordering and Receiving $130 ($130,000/1,000) per order
Machine Setup $330 ($297,000/900) per setup
Machining $4 ($1,000,000/250,000) per machine hour
Assembly $0.80 ($1,600,000/2,000,000) per part
Inspection $300 ($300,000/1,000) per inspection
Estimated Rates Budget Deluxe
Overhead
Ordering and Receiving $130 $78,000 $52,000
Machine Setup $330 165,000 132,000
Machining $4 600,000 400,000
Assembly $0.80 960,000 640,000
Inspection $300 165,000 135,000
Total overhead costs $1,968,000 $1,359,000
Production units 700,000 200,000
Overhead per unit $2.81 $6.80
Myers Corporation has the following data related to direct materials costs for November: actual cost for 5,000 pounds of material at $4.50 per pound and standard cost for 4,800 pounds of material at $5.10 per pound. The direct materials price variance is a.$3,000 favorable b.$2,880 unfavorable c.$3,000 unfavorable d.$2,880 favorable
Answers
Answer:
a. $3,000 favorable
Explanation:
Calculation to determine the direct materials price variance
Using this formula
Direct materials price variance=Actual costs(Standard costs per pound- Actual costs per pound)
Let plug in the formula
Direct materials price variance=5,000($5.10-$4.50)
Direct materials price variance=5,000($0.6)
Direct materials price variance=
$3,000 favorable
Therefore Direct materials price variance is $3,000 favorable
Marginal benefit is:________
a. the additional benefit that one more unit of something will provide.
b. the average benefit that each unit of something provides.
c. the change in the total cost that a company can receive by producing another unit of product.
d. the additional cost that one more unit of something will cost.
Answers
Answer:
A
Explanation:
Marginal benefit is the benefit derived from consuming one extra unit of a good
. Marginal benefit is the additional benefit derived from consuming one more unit of a good. the consumption decision is to consume more units of a good that gives the higher benefit per good.
Marginal benefit decreases as consumption increases
An example of marginal benefit.
Imagine a traveller arriving from the desert where he hadn't had a drink of water in days .he is offered his first glass of water. the first cup of water he drinks would give him the highest benefit. As more and more cups of water is drank, marginal benefit decreases. At the point where he is fully satisfied, he stops drinking water and marginal benefit becomes zero.
Bold Stapler Sales Company (BSS) began 2019 with cash of $80,000, inventory of $7,200 (400 staplers that cost $18 each), $2,000 of common stock, and $2,000 of retained earnings. The following events occurred during 2019.
1. BSS purchased additional inventory twice during 2019. The first purchase consisted of 1,600 staplers that cost $21 each, and the second consisted of 2,400 staplers that cost $25 each. The purchases were on account.
2. The company sold 4,220 staplers for cash at a selling price of $45 each.
Required: Determine the ending inventory and cost of goods sold using the three different cost flow assumptions: FIFO, LIFO, and Weighted Average.
Answers
Answer:
Bold Stapler Sales Company (BSS)
FIFO LIFO Weighted Average
Ending inventory $4,500 $3,240 $4,122
Cost of goods sold $96,300 $97,560 $96,678
Explanation:
a) Data and Calculations:
Beginning balances in 2019:
Cash $80,000
Inventory $7,200
Common stock $2,000
Retained earnings $2,000
Description Units Unit Cost Total
Beginning inventory 400 $18 $7,200
The first purchase 1,600 $21 33,600
The second purchase 2,400 $25 60,000
Goods available 4,400 $100,800
Sales of units (4,220) $45 $189,900
Ending inventory 180
FIFO:
Ending inventory = $4,500 ($25 * 180)
Cost of goods sold = $96,300 ($100,800 - $4,500)
LIFO:
Ending inventory = $3,240 ($18 * 180)
Cost of goods sold = $97,560 ($100,800 - $3,240)
Weighted Average:
Weighted average cost per unit = $22.91 ($100,800/4,400)
Ending inventory = $4,122 (22.91 * 180)
Cost of goods sold = $96,678 ($100,800 - $4,122)
Two national companies both sell a variety of soaps and lotions. When looking at the balance sheets, one company lists goodwill as an asset, but the other company does not. What does this tell you about these companies
Answers
Answer: A. The first company purchased an entire business to expand the company, whereas the second company likely has not yet purchased another entire business.
Explanation:
Goodwill is the value over a company's net value that it is purchased for. For instance, if a company is worth $15,000 but was purchased for $20,000, $5,000 is the goodwill.
A company only expresses goodwill in its books when it has purchased another company for more than the company's value and when the balance sheets of the purchaser and the purchased were consolidated, the goodwill is therefore shown.
If the first company has goodwill as an asset then it means that it has purchased a company before unlike the second company which has not purchased any company as of yet.
Goodwill is referred to as intangible assets and is associated with the reputation of the firm. The goodwill depends on the gradual growth of the company at the variable stages. It is the purchase or acquisition of the assets at fair value and acquiring limited liabilities for the better growth of the company.
The correct option for the answer is A. The first company purchased an entire business to expand the company, whereas the second company likely has not yet purchased another entire business.
Options A. The first company purchased an entire business to expand the company, whereas the second company likely has not yet purchased another entire business is correct because the first company has made the decision to expand by owning it and getting some of the major investors from the market for the investment as well.
Options:
B. The first company regularly donates to charitable causes, whereas the second company does not donate to charitable causes.
C. The first company purchased patents above market value to expand their product line, whereas the second company likely developed all of their patents in-house.
D. The first company added research and development costs as an intangible asset, whereas the second company expensed their research and development costs immediately
These options are wrong because they do not specify the correct meaning of the sentence in the context. They are verifying the other concept as compared to the context.
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A company purchased a computer system at a cost of $26,000. The estimated useful life is 8 years, and the estimated residual value is $4,000. Assuming the company uses the double-declining-balance method, what is the depreciation expense for the second year
Answers
Answer:
the depreciation expense for the second year is $4,875
Explanation:
The calculation of the depreciation expense for the second year is given below:
First the depreciation rate should be
= 1 ÷ 8 × 2
= 25%
Now the first year depreciation is
= $26,000 × 25%
= $6,500
Now the second year depreciation should be
= ($26,000 - $6,500) × 2
= $4,875
Hence, the depreciation expense for the second year is $4,875
Given the following information, determine the cost of goods sold at December 31 using the LIFO periodic inventory method:
December 2: 5 units were purchased at $7 per unit.
December 9: 10 units were purchased at $9.40 per unit.
December 11: 12 units were sold at $35 per unit.
December 15: 20 units were purchased at $10.15 per unit.
December 22: 18 units were sold at $35 per unit.
a. $51.75
b. $94.00
c. $50.75
d. $83.22
e. $41.30
Answers
Answer:
COGS= $297
Explanation:
Giving the following information:
December 2: 5 units were purchased at $7 per unit.
December 9: 10 units were purchased at $9.40 per unit.
December 11: 12 units were sold at $35 per unit.
December 15: 20 units were purchased at $10.15 per unit.
December 22: 18 units were sold at $35 per unit.
First, we need to calculate the number of units sold:
Number of units sold= 12 + 18= 30
Now, under the LIFO (last-in, first-out) method, the cost of goods sold is calculated using the cost of the lasts units incorporated into inventory:
COGS= 20*10.15 + 10*9.4
COGS= $297
