Answer:
Option E, helping the United States’ balance of payments, is the right answer.
Explanation:
Option “E” is the correct answer because the balance of payment records all the transactions that occurred between the home country and the rest of the word. Therefore, if the foreign tourist spends in the country that means they are helping the balance of payment. This will increase the country’s surplus and the ability to pay the expenses because tourism is helping to generate revenue.
In a competitive industry, it takes a fixed ratio of one skilled worker and two unskilled workers to produce a unit of output. If the immigration of unskilled workers lowers the wage of unskilled workers, it will likely
Answer:
The answer is that the ratio is likely the same.
Explanation:
There is no equivalent of how many unskilled worker can replace a skilled worker. Also, it's a fixed ratio of one skilled worker and two unskilled workers to produce a unit of output. Therefore, even though the wage of unskilled workers decreases because of a surplus in immigration of unskilled workers, and assume that the rest is the same, firms won't hire more unskilled workers.
When Matt has an income of $2,000, he consumes 30 units of good A and 50 units of good B. After Matt's income increases to $3,000, he consumes 25 units of good A and 95 units of good B. Which of the following statements is correct?
a. Both goods A and B are normal goods.
b. Both goods A and B are inferior goods.
c. Good A is a normal good, and good B is an inferior good.
d. Good A is an inferior good, and good B is a normal good.
Answer:
onoooooo seeeeeeeeeeeeeeeeeeeeeeeeeeeeee
When Matt has an income of $2,000, he consumes 30 units of good A and 50 units of good B. After Matt's income increases to $3,000, he consumes 25 units of good A and 95 units of good B. Good A is a normal good, and good B is an inferior good is the correct statement. Option C is the correct answer.
A normal good is a type of good for which demand increases as income increases. In this scenario, as Matt's income increases from $2,000 to $3,000, his consumption of good A decreases from 30 units to 25 units. This indicates an inverse relationship between his income and the quantity of good A consumed, suggesting that good A is a normal good. Option C is the correct answer.
On the other hand, an inferior good is a type of good for which demand decreases as income increases. In this case, as Matt's income increases, his consumption of good B increases from 50 units to 95 units. This suggests a positive relationship between his income and the quantity of good B consumed, indicating that good B is an inferior good.
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22. On January 1, 2021, Princess Corporation leased equipment to King Company. The lease term is eight years. The first payment of $675,000 was made on January 1, 2021. The equipment cost Princess Corporation $3,600,000. The present value of the lease payments is $3,961,183. The lease is appropriately classified as a sales-type lease. Assuming the interest rate for this lease is 10%, how much interest revenue will Princess record in 2022 on this lease
Answer:
$293,980.13
Explanation:
Calculation of how much of the interest revenue Princess will record in 2022 on the lease
First Step is to find the interest for year 2021
Present Value January 1, 2021 $3,961,183
Less Payment January 1, 2021 (675,000)
=$3,286,183
Hence,
2021 Interest =$3,286,183× 10%
2021 Interest = $328,618.3
Second Step
Second Payment $675,000
Less Interest (328,618.3)
Reduced balance $346,381.7
Third Step is to find the how much interest revenue will Princess record in 2022 on the lease
2021 $3,286,183
Less Reduced balance (346,381.7)
January 1 2022 Liability = $2,939,801.3× 10%
2022 Interest Revenue =$293,980.13
Therefore the amount of interest revenue that Princess will record in 2022 on the lease will be $293,980.13
The ending finished goods inventory for each month equals 50% of next month's sales in units . How many units must be produced in February?
Answer: 15,751.5 units
Explanation:
Units produced in February are calculated as;
Units Produced = Ending Finished goods - Beginning Finished goods + Budgeted Sales
Ending finished goods inventory for each month equals 50% of next month's sales in units.
Ending finished goods for February
= 50% * 15,581
= 7,790.5 units
Ending finished goods for January is beginning for February
= 50% * 15,922
= 7,961
Units Produced = Ending Finished goods - Beginning Finished goods + Budgeted Sales
= 7,790.5 - 7,961 + 15,922
= 15,751.5 units
Twilight Corporation acquired End-of-the-World Products on January 1, 2020 for $6,200,000, and recorded goodwill of $1,000,000 as a result of that purchase. At December 31, 2021, the End-of-the-World Products Division had a fair value of $5,440,000. The net identifiable assets of the Division (including goodwill) had a carrying value of $5,740,000 at that time. What amount of loss on impairment of goodwill should Twilight record in 2021
Answer:
Loss on impairment of goodwill that should be recorded is $300,000
Explanation:
Carrying value of net identifiable assets $5,740,000
Less: Fair value $5,440,000
Loss on impairment of goodwill $300,000
Krystal is 47 years old and single. She is a high school principal, making $75,000 a year. She currently owns a 401(k) valued at $85,000. Krystal would like to retire at age 65 with $1.2 million in her retirement nest egg. She plans to contribute $12,000 a year to her retirement fund, growing at 10%.Required:a. Will Krystal reach her goal? Justify your answer by using the Investment Calculator on Foundations U b. If she won't reach her goal, what needs to change in order for her to reach it? c. Is it really possible to get 10% growth in an investment fund? How?
Answer:
a) Krystal's account balance when she is 65:
$75,000 x (1 + 10%)¹⁸ = $416,993.80
$12,000 x 45.599 (FV annuity factor, 10%, 18 periods) = $547,188
total account balance = $964,181.80
Krystal will not reach her goal.
b) she need to save $1,200,000 - $964,181.80 = $235,818.20
she will need to save an extra $235,818.20 / 45.599 = $5,171.57 per year
her total contributions per year = $12,000 + $5,171.57 = $17,171.57
c) The historical growth rate of the S&P 500 is 12%, so it is really possible to earn at least 10%. Maybe the stock market is not going well right now, but you must remember that retirement accounts are long term accounts and last for many years. The market will have time to bounce back.
Idaho Industries Inc. is considering a project that has an initial aftertax outlay or aftertax cost of $450,000. The respective future cash inflows from its fiveyear project for years 1 through 5 are $95,000 each year. Idaho expects an additional cash flow of $60,000 in the fifth year. The firm uses the IRR method and has a hurdle rate of 10%. Will Idaho accept the project? A. Idaho accepts the project because it has an IRR greater than 10%. B. Idaho accepts the project because it has an IRR greater than 5%. C. Idaho rejects the project because it has an IRR less than 10%. D. There is not enough information to answer this question.
Answer:
c
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 using a financial calculator
Cash flow in year 0 = $-450,000
Cash flow each year from year 1 to 4 = $95,000
Cash flow in year 5 = $95,000 + $60,000 = $155,000
IRR = 5.62%
Idaho would reject the project because the IRR is less than the hurdle rate
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
The following information ($ in millions) comes from a recent annual report of Amazon.com, Inc.:Net sales $ 10,711Total assets 4,363End of year balance in cash 1,022Total stockholders' equity 431Gross profit (Sales-Cost of Sales) 2,456Net increase in cash for the year 9Operating expenses 2,067Net operating cash flow 702Other income (expense), net (12)a. Compute Amazon's balance in cash at the beginning of the year.b. Compute Amazon's total liabilities at the end of the year.c. Compute cost of goods sold for the year.
d. Compute the income before income tax for Amazon.
Answer and Explanation:
The computation is shown below:
1. Beginning cash balance is
= Ending cash balance - Increase in cash
= $1,022 - $9
= $1,013
2. As we know that
Assets = Total liabilities + Total Equity
$4,363 = Total liabilities + $431
= $4,363 - $431
= $3,932
3. Gross profit = Net sales - Cost of goods sold
so,
Cost of goods sold = Net sales - Gross profit
= $10,711 - $2,456
= $8,255
4. Income before taxes is
= Revenue - expenses
= $10,711 - $2,456 - $2,067 -$12
= $6,176
TB MC Qu. 7-137 Farris Corporation, which has ... Farris Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $ 144 Units in beginning inventory 0 Units produced 9,350 Units sold 8,950 Units in ending inventory 400 Variable costs per unit: Direct materials $ 26 Direct labor $ 68 Variable manufacturing overhead $ 14 Variable selling and administrative expense $ 18 Fixed costs: Fixed manufacturing overhead $ 140,250 Fixed selling and administrative expense $ 9,600 What is the net operating income (loss) for the month under variable costing
Answer:
Net operating income= $11,250
Explanation:
Giving the following information:
Selling price $144
Units sold 8,950
Variable costs per unit:
Direct materials $26
Direct labor $68
Variable manufacturing overhead $14
Variable selling and administrative expense $18
Total variable cost= $126
Fixed costs:
Fixed manufacturing overhead $140,250
Fixed selling and administrative expense $9,600
Variable costing income statement:
Sales= 8,950*144= 1,288,800
Total variable cost= (126*8,950)= (1,127,700)
Contribution margin= 161,100
Fixed manufacturing overhead= (140,250)
Fixed selling and administrative expense= (9,600)
Net operating income= 11,250
1) Compute cash flows from financing activities using the above company information.
Addtional Short-Term Borrowings $20,000
Purchase of short term investments $5000
Cash Dividends Paid 16000
Interest Paid 8000
2) Compute cash flows from investing activities using the above company information.
Sale of short term investments $6000
Cash Collections from Customers $16,000
Purchase of used equipment $5000
Depreciation Expense $2000
Answer:
$4,000$1,000Explanation:
1. Financing Cashflows relate to cash spent or received for the capital used in the company. These include Equity, Long term borrowings and dividends. Interest payments go to the Operating Cashflow and investments go to the Investing cashflow.
Financing Cashflow is;
= Inflow - Outflow
= +20,000 - 16,000
= +$4,000
2. Investing Cashflows related to cash spent or received from fixed assets as well as the securities of other companies. Cash collections does not fall here but rather under Operating cashflows along with depreciation.
Investing Cashflow is;
= Inflow - Outflow
= +6,000 - 5,000
= $1,000
Charger Company's most recent balance sheet reports total assets of $28,413,000, total liabilities of $16,113,000 and total equity of $12,300,000. The debt to equity ratio for the period is (rounded to two decimals):
Answer:
Debt to equity ratio is 1.31
Explanation:
Given the above inflation, the formula for debt to equity ratio is
= Total debt / Total equity
= $16,113,000 / $12,300,000
= 1.31
Therefore, debt to equity ratio is 1.31
Ultimate Butter Popcorn issues 5%, 15-year bonds with a face amount of $58,000. The market interest rate for bonds of similar risk and maturity is 5%. Interest is paid semiannually. At what price will the bonds issue
Answer:
So, the bonds will issue at par which means that they will issue at their face value of $58000
Explanation:
If the coupon rate paid by the bond and the market interest rates are same, the bonds are always issued at par. We can check this through the following.
To calculate the price of the bond, we need to first calculate the coupon payment per period. We assume that the interest rate provided is stated in annual terms. As the bond is a semi annual bond, the coupon payment, number of periods and semi annual YTM will be,
Coupon Payment (C) = 0.05 * 1/2 * 58000 = $1450
Total periods (n)= 15 * 2 = 30
r or YTM = 5% * 1/2 = 2.5% or 0.025
The formula to calculate the price of the bonds today is attached.
Bond Price = 1450 * [( 1 - (1+0.025)^-30) / 0.025] + 58000 / (1+0.025)^30
Bond Price = $58000
Sudoku Company issues 17,000 shares of $8 par value common stock in exchange for land and a building. The land is valued at $230,000 and the building at $372,000. Prepare the journal entry to record issuance of the stock in exchange for the land and building.
Answer:
Debit Land for $230,000
Debit Building for $372,000
Credit Common Stock (w.1) for $136,000
Credit Paid in capital in excess of per value (w.2) for $466,000
Explanation:
The journal entry will look as follows:
Account Name Dr ($) Cr ($)
Land 230,000
Building 372,000
Common Stock (w.1) 136,000
Paid in capital in excess of per value (w.2) 466,000
(To record issuance of stock in exchange for the land and building.)
Workings:
w.1: Common stock = Number of shares issued * Price per share = 17,000 * $8 = $136,000
w.2: Paid in capital in excess of per value = Value of land + Value of building - Common stock = $230,000 + $372,000 - $136,000 = $466,000
g how much money should be deposited today in account that earns 5% compounded interest quarterly so that it will accumulate to 7600 in 9 years
Answer:
Present value of 7600 in 9 years at 5% compounded quarterly = 4,859.51
Explanation:
You will need to invest $4,859.51 at the beginning to reach the future value of $7,600.00 in 9 years at 5% compounded quarterly.
Using an online financial calculator:
FV (Future Value) = $7,600
PV (Present Value) = $4,859.51
N (Number of Periods) = 36 quarters (9 x 4)
I/Y (Interest Rate) = 1.250% (5%/4)
PMT (Periodic Payment) = $0.00
Starting Investment = $4,859.51
Total Principal = $4,859.51
Total Interest = $2,740.49
The compound interest rate is divided into the number of quarters, which is 4 and the number of periods will become 9 x 4 = 36. Then the present value of $7,600 is determined using the PV table or an online calculator, as above.
34. Pension gains related to plan assets occur when: A. The return on plan assets is higher than expected. B. The vested benefit obligation is less than expected. C. Retiree benefits paid out are less than expected. D. The accumulated benefit obligation is more than expected.
Answer: A. The return on plan assets is higher than expected
Explanation:
Pension gains related to plan assets is said to occur when the return on plan assets is higher than expected. In a situation whereby an individual or a firm expect a certain return on an asset and when the asset's return was eventually more than the expected return on it, this means that there is a pension gains related to plan assets.
A company purchased a tract of land for its natural resources at a cost of $1,500,000. It expects to mine 2,000,000 tons of ore from this land. The salvage value of the land is expected to be $250,000. If 150,000 tons of ore are mined during the first year, the journal entry to record the depletion is:_______.
a. Debit Depletion Expense $93,750; credit Natural Resources $93,750.
b. Debit Cash $112,500; credit Natural Resources $112,500.
c. Debit Depletion Expense $93,750; credit Accumulated Depletion $93,750.
d. Debit Cash $93,750; credit Accumulated Depletion $93,750.
e. Debit Depletion Expense $112,500; credit Accumulated Depletion $112,500.
Answer:
Option c is the correct answer.
Explanation:
The depletion expense or charge for the period can be calculated using the following formula,
Depletion expense = [(Cost - Salvage Value) / Total units expected to be mined] * Units mined during the period
Depletion expense = [(1500000 - 250000) / 2000000] * 150000
Depletion expense = $93750
The entry to record the expense is,
Depletion expense 93750 Dr
Accumulated depletion 93750 Cr
So, option c is the correct answer.
ABC issued callable bonds on January 1, 2018. ABC's accountant has projected the following amortization schedule from issuance until maturity: Date Cash Paid Interest Expense Increase in Carrying Value Carrying Value 1/1/2018 $194,758 6/30/2018 $7,000 $7,790 $790 195,548 12/31/2018 7,000 7,822 822 196,370 6/30/2019 7,000 7,855 855 197,225 12/31/2019 7,000 7,889 889 198,114 6/30/2020 7,000 7,925 925 199,039 12/31/2020 7,000 7,961 961 200,000 ABC buys back the bonds for $196,000 immediately after the interest payment on 12/31/2018 and retires them. What gain or loss, if any, would ABC record on this date (use a minus sign in front of the number if it is a loss)?
Answer:
Gain $370
Explanation:
Calculation for the gain or loss, if ABC record on this date 12/31/2018
Based on the information given on the amortization schedule, on this date 12/31/2018 the Carrying value was $196,370 while we were still told that ABC buys back the bonds for $196,000 on 12/31/2018
Now let calculate for the gain or loss using this formula
Gain/Loss = Carrying value- Stock bond
Let plug in the formula
Gain/Loss =$196,370-$196,000
Gain/Loss=$370
Therefore if ABC record on this date 12/31/2018, ABC will have a gain of $370
The standard quantity allowed for the units produced was 4000 pounds, the standard price was $2.50 per pound, and the materials quantity variance was $350 favorable. Each unit uses 1 pound of materials. How many units were actually produced
Answer:
Unites actually produced = 4,000 units
Explanation:
Material quantity variance occurs when the actual quantity used to achieved a given level of output is more or less than the standard quantity.
It is determined by the difference between the actual and standard quantity of material for the actual level of output multiplied by the the standard price
Material quantity variance in unit = Materials quantity variance in value /standard price
Material quantity variance in unit = 350/2.50 =140 pounds
Actual quantity used (in pounds) = standard quantity allowed - Material quantity variance
= 4000 - 140 = 3,860 pounds
Actual units produced = Standard quantity allowed/ standard quantity per unit
= 4,000/1 = 4000 units
Unites actually produced = 4,000 units
Kaskin, Inc., stock has a beta of 1.2 and Quinn, Inc., stock has a beta of 0.6. Which of the following statements is most accurate? The equilibrium expected rate of return is higher for Kaskin than for Quinn. The stock of Kaskin has more total risk than Quinn. The stock of Quinn has more systematic risk than that of Kaskin.
Answer:
The equilibrium expected rate of return is higher for Kaskin than for Quinn.
Explanation:
Option A “The equilibrium expected rate of return is higher for Kaskin than for Quinn” is more accurate because the expected return is calculated by multiplying the risk premium with beta value and then adding with risk-free return. However, if the beta value is high, then the magnitude after multiplying with the risk premium will be high. Moreover, is magnitude will be added to risk-free return to find the expected return. Thus, it can be seen that Kaskin has high beta 1.2 as compared to Quinn’s beta value 0.6. So, the Kaskin has a higher expected return.
You have an annuity which pays $1,200 every two years. The first payment is two years from now and the last payment is ten years from now. You can trade that annuity for another annuity of equivalent present value, which pays $180 per quarter starting today. The interest rate for both annuities is 4% per annum convertible quarterly. If you took the second annuity, how many quarterly payments would you receive? The last payment may be less than $180 but not more than $180.
Answer:
31 payments
Explanation:
the present value of the first annuity is:
$1,200 / (1 + 1%)⁸ + $1,200 / (1 + 1%)¹⁶ + $1,200 / (1 + 1%)²⁴ + $1,200 / (1 + 1%)³² + $1,200 / (1 + 1%)⁴⁰ = $1,108.18 + $1,023.39 + $945.08 + $872.76 + $805.98 = $4,755.39
to determine the length of the second annuity:
PV = annuity payment x annuity factor
annuity factor = PV / annuity payment = $4,755.39 / $180 = 26.4188333
using an annuity table we must look for a present value annuity factor that corresponds to 1% interest rate and is close to 26.4188333
the annuity factor is between 30 and 31 payments. Since the final payment has to be less or equal to $180, we have to choose 31 payments.
Write a detailed note on Manufacturing Process types and Service process types in process design?
Answer:
Each of the process are used to the crosses organizational borders.
Explanation:
Process structure of manufacturing:
Job process: It is highly adaptable, scaled operation and structured around particular events. Batch process: It most common used in industries. It is small to large batches. Line process: It is the repetitive process and have modular production with large quantity. Continuous flow chart: It is product focused process. It processed only one item at a time.Process design: There are three major process of design
Professional service designMass service designService shop designIf someone received cash 2 700 for sold goods, which journal account should be created?
Answer:
cash a/c dr
To sales a/c
( being goods sold in cash )
The following information pertains to J Company's outstanding stock for 2021:
Common stock, $1 par
Shares outstanding, 1/1/2021 10,000
2 for 1 stock split, 4/1/2021 10,000
Shares issued, 7/1/2021 5,000
Preferred stock, $100 par, 7% cumulative
Shares outstanding, 1/1/2021 4,000
What is the number of shares J should use to calculate 2018 basic earnings per share?
a. 20,000.
b. 22,500.
c. 25,000 .
d. 27,000.
Answer: b. 22,500
Explanation:
J should use the total number of outstanding common stock at end of year to calculate 2018 basic earnings.
As a result of the Stock-split, the shares are split into 2 for 1.
There were 10,000 shares split so;
= 10,000 * 2
= 20,000
On the 1st of July, 5,000 shares were issued. This means that up till December 2021, the stock was outstanding for 6 months.
This will reflected by;
= 5,000 * 6/12
= 2,500 shares
Total shares = 20,000 + 2,500
= 22,500 shares
Pam Erickson Construction Company changed from the completed-contract to the percentage-of-completion method of accounting for long-term construction contracts during 2015. For tax purposes, the company employs the completed-contract method and will continue this approach in the future. (Hint: Adjust all tax consequences through the Deferred Tax Liability account.) The appropriate information related to this change is as follows.
Pretax Income from:
Percentage-of-Completion Completed-Contract Difference
2014 $752,200 $586,700 $165,500
2015 683,500 444,700 238,800
(a) Assuming that the tax rate is 30%, what is the amount of net income that would be reported in 2015?
Net income $
(b) What entry(ies) are necessary to adjust the accounting records for the change in accounting principle?
Answer:
a. $478,450
b.Dr Construction in Process $165,500
Cr Deferred tax liability $49,650
Cr Retained earnings $115,850
Explanation:
A. Calculation for the amount of net income that would be reported in 2015 for Pam Erickson Construction Company
Using this formula
Net income =(Income before income tax ) Income before income tax-Tax rate
Let plug in the formula
Net income= $683,500 - (683,500 × 30%)
Net income= $683,500 - $205,050
Net income= $478,450
B. Preparation of the Journal entry(ies) that are necessary to adjust the accounting records
For Pam Erickson Construction Company
Dr Construction in Process $165,500
Cr Deferred tax liability $49,650
($165,500 × 30%)
Cr Retained earnings $115,850
($165,500 × (100%-30%)
Cadiz Co. uses flexible budgets to control its selling expenses. Monthly sales are expected to be from $300,000 to $360,000. Variable costs and their percentage relationships to sales are: Sales commissions 5% Advertising 4% Traveling 7% Delivery 1% Fixed selling expenses consist of sales salaries $40,000 and depreciation on delivery equipment $10,000. The actual selling expenses incurred in February, 2019, by Cadiz are as follows: Sales commissions $17,200 Advertising 12,000 Traveling 23,700 Delivery 2,400 Fixed selling expenses consist of sales salaries $41,500 and depreciation on delivery equipment $10,000. Prepare a flexible budget performance report, assuming that February sales were $330,000.
Answer:
Cadiz Co.
Flexible Budget Performance Report:
Budget
Flexible Actual Variance
Sales $330,000 $330,000 $0
Variable costs:
Sales commissions 16,500 17,200 700 U
Advertising 13,200 12,000 1,200 F
Traveling 23,100 23,700 600 U
Delivery 3,300 2,400 900 F
Fixed selling expenses:
Sales Salaries 40,000 41,500 1,500 U
Depreciation: delivery 10,000 10,000 0 None
Total 700 U
Explanation:
a) Data:
Budget
Static Actual Variance
Sales $360,000 $330,000 $30,000 U
Variable costs:
Sales commissions 18,500 17,200 1,300 F
Advertising 14,400 12,000 2,400 F
Traveling 25,200 23,700 1,500 F
Delivery 3,600 2,400 1,200 F
Fixed selling expenses:
Sales Salaries 40,000 41,500 1,500 U
Depreciation: delivery 10,000 10,000 0 None
b) Flexible Variable Expenses:
Sales commission = 5% of $330,000 = $16,500
Advertising = 4% of $330,000 = $13,200
Traveling = 7% of $330,000 = $23,100
Delivery = 1% of $330,000 = $3,300
c) Cadiz Co.'s flexible budget changes with respect to the volume of sales. Since some percentages of the sales are given for Sales commission, advertising, traveling, and delivery, these change as the volume of sales changes. This flexible budget forms the basis for the management of Cadiz Co. to judge the actual performance with the budget, which enables control to be instituted.
Tom Company reports the following data.
Sales $385,187
Variable costs 200,887
Fixed costs 87,300
Required:
Determine Tom Company's operating leverage. Round your answer to one decimal place.
Answer: 1.9
Explanation:
The Operating Leverage is calculated by;
Operating leverage = Contribution margin / Operating income
Contribution Margin
= Sales - Variable Costs
= 385,187 - 200,887
= $184,300
Operating Income
= Contribution Margin - Fixed Costs
= 184,300 - 87,300
= $97,000
Operating Leverage = 184,300/ 97,000
= 1.9
You just sold 500 shares of Wesley, Inc. stock at a price of $30.92 a share. Last year, you paid $32.04 a share to buy this stock. What is your capital gain on this investment
Answer:
-$560
Explanation:
The computation of capital gain on this investment is shown below:-
Capital gain = (Stock price - Paid shares) × Sold shares
where,
The Stock price is $30.92
Paid shares is $32.04
And, the sold shares is 500 shares
Now placing these values to the above formula
So, the capital gain on this investment is
= ($30.92 - $32.04) × 500
= -$1.12 × 500
= -$560
The following data regarding purchases and sales of a commodity were taken from the related perpetual inventory account:
June 1Balance 25 units at $60
6 Sale 20 units
8 Purchase 20 units at $61
16 Sale 10 units
20 Purchase 20 units at $62
23 Sale 25 units
30 Purchase 15 units at $63
Required:
Calculate the cost of the ending inventory at June 30, using (a) the first-in, first-out (FIFO) method and (b) the last-in, first-out (LIFO) method. Identify the quantity, unit price, and total cost of each lot in the inventory.
Answer:
Under LIFO:
date transaction units unit price total
1 Balance 25 $60 $1,500
6 Sale 20 $60 $1,200
8 Purchase 20 $61 $1,220
16 Sale 10 $61 $610
20 Purchase 20 $62 $1,240
23 Sale 20 $62 $1,240
23 Sale 5 $61 $305
30 Purchase 15 $63 $945
ending inventory = total purchases + beginning balance - COGS = ($1,220 + $1,240 + $945) + $1,500 - ($1,200 + $610 + $1,240 + $305) = $3,405 + $1,500 - $3,355 = $1,550
Under FIFO:
date transaction units unit price total
1 Balance 25 $60 $1,500
6 Sale 20 $60 $1,200
8 Purchase 20 $61 $1,220
16 Sale 5 $60 $300
16 Sale 5 $61 $305
20 Purchase 20 $62 $1,240
23 Sale 15 $61 $915
23 Sale 10 $62 $620
30 Purchase 15 $63 $945
ending inventory = total purchases + beginning balance - COGS = ($1,220 + $1,240 + $945) + $1,500 - ($1,200 + $300 + $305 + $915 + $620) = $3,405 + $1,500 - $3,340 = $1,565
On November 10 of the current year, Flores Mills sold carpet to a customer for $8,000 with credit terms 1/10, n/30. Flores uses the gross method of accounting for cash discounts. What is the correct entry for Flores on November 10
Answer:
Nov 10,
DR Accounts Receivable .........................$8,000
CR Sales ......................................................................$8,000
(To record credit sale)
Explanation:
On the day that Flores Mills sold the carpet, they are to record this as a credit sales as cash was not paid. The correct entry would be to debit Accounts receivable and credit Sales.
The discount will only be applied if/when the customer settles the account.
When marginal cost is greater than average cost, average cost must be:_________.
a. rising.
b. falling.
c. constant.
d. The direction of change in marginal cost cannot be determined from this information.
Answer:
A
The average cost will be rising