The first issue that organizations should consider while developing their strategic pricing plans is their branding strategies and segmentation and targeting initiatives.
To begin with, organizations must focus on their branding strategies to build brand equity and brand awareness. This can be achieved by investing in advertising, product positioning, and packaging. In addition, they should focus on developing a unique value proposition that differentiates their product or service from the competition.
Furthermore, organizations should also focus on segmentation and targeting initiatives to identify their target market and tailor their pricing strategy accordingly. This involves dividing the market into smaller segments based on demographics, psychographics, and behavior patterns, and then targeting these segments with a specific pricing strategy.
Overall, by focusing on branding strategies and segmentation and targeting initiatives, organizations can develop a successful strategic pricing plan that maximizes profitability and enhances their brand image.
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in a responsibility accounting environment, upper managers evaluate the performance of the unit managers based
In a responsibility accounting environment, upper managers evaluate the performance of the unit managers based on the unit's specific goals, objectives, and responsibilities.
Each unit is responsible for specific activities or functions, and the unit managers are held accountable for the unit's performance. Upper managers use various performance measures, such as financial metrics, operational indicators, and nonfinancial measures, to evaluate unit managers' performance. These performance measures are tailored to the specific unit's objectives and reflect the unit's contribution to the overall organizational performance. By using a responsibility accounting system, upper management can effectively delegate responsibility, monitor performance, and encourage accountability. Unit managers are empowered to make decisions that impact their unit's performance, and upper management can focus on evaluating and improving overall organizational performance. Additionally, responsibility accounting helps identify areas of strength and weakness in the organization, allowing management to take appropriate action to address any issues.
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_____________is the term used to describe the costs businesses face when changing the prices at which they sell their products. shoe leather costs menu costs economic costs
Menu costs is the term used to describe the costs businesses face when changing the prices at which they sell their products.
These costs refer to the expenses incurred in updating price lists, advertising, packaging, and other associated costs that arise when a company changes its prices. Menu costs are considered a form of economic cost as they represent the resources that a business must devote to maintain its competitiveness. These costs can vary significantly depending on the size of the company and the complexity of its product line. In addition to menu costs, businesses may also incur "shoe leather costs" which refers to the costs associated with physically changing prices, such as traveling to different locations to change prices on products.
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The $1,000 face value ABC bond has a coupon rate of 6%, with interest paid semi-annually, and matures in 5 years. If the bond is priced to yield 8%, what is the bond's value today? o FV = $1,000 o CF = $60/2 = $30 o N = 5 x 2 = 10 o i = 8%/2 = 4% o PV = $918. 89
Correct! Using the formula for the present value of a bond, we can calculate the value of the ABC bond today:
PV = (C / (1 + r)^1) + (C / (1 + r)^2) + ... + (C + FV / (1 + r)^n)
where:
C = the semi-annual coupon payment ($60 in this case)
r = the semi-annual yield (8% / 2 = 4% in this case)
n = the number of semi-annual periods (5 years x 2 = 10 semi-annual periods)
FV = the face value of the bond ($1,000 in this case)
Plugging in the numbers, we get:
PV = ($30 / 1.04^1) + ($30 / 1.04^2) + ... + ($30 + $1,000 / 1.04^10)
PV = $918.89
Therefore, the value of the ABC bond today is $918.89.
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which approach to pricing should root builders emphasize? why?
I do not have access to specific information about "root builders" and their industry or products. However, in general, businesses have several pricing strategies to choose from, such as cost-plus pricing, value-based pricing, penetration pricing, and skimming pricing.
Value-based pricing, which sets prices based on the perceived value of the product or service to the customer, may be a suitable approach for root builders. The perceived value of their products, such as gardening or landscaping supplies, may be influenced by factors such as quality, convenience, and customer service. By focusing on the value of their products and services, root builders may be able to set prices that are higher than competitors and still attract customers who are willing to pay for the perceived value. Another approach could be cost-plus pricing, where the price is set by adding a markup to the cost of producing the product. This may be more appropriate if the market is highly competitive and price-sensitive. Ultimately, the pricing approach should be based on an understanding of the target market, the competition, and the costs associated with producing and selling the product or service.
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which is not a step in the investment management process discussed in class?
In investment management, the process typically involves several steps, including goal-setting, asset allocation, security selection, and monitoring and rebalancing.
However, one step that is not usually part of the investment management process is stock promotion. Stock promotion refers to the practice of promoting a particular stock or investment without proper research and analysis. It is often done for personal gain, rather than with the goal of achieving the investor's objectives. Investment management involves careful analysis of the investor's risk tolerance, financial goals, and market conditions, and then selecting the appropriate investment options to meet those needs.
It is essential to consider various factors such as the market trend, risk level, portfolio diversification, and performance tracking to make informed decisions. While there may be other steps involved in the investment management process, stock promotion is not one of them.
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the biggest difference between service retailers and merchandise retailers is their profits.
true or false
False. The biggest difference between service retailers and merchandise retailers is not their profits. The main distinction lies in the nature of the products they offer and the way they deliver value to customers.
Service retailers primarily offer intangible services, such as hair salons, hotels, restaurants, healthcare providers, and consulting firms. They focus on providing expertise, skills, and experiences to customers.
Merchandise retailers, on the other hand, offer tangible products, including clothing stores, supermarkets, electronics retailers, and department stores. They specialize in selling physical goods to customers.
While profitability can vary across different businesses within the service retail and merchandise retail sectors, it is not the defining factor that distinguishes them. Profitability depends on various factors such as market conditions, competition, pricing strategies, and operational efficiency, among others.
In summary, the difference between service retailers and merchandise retailers is based on the type of products they offer and how they deliver value, rather than being solely determined by their profits.
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when a large company owns or has stake in the breeding, production, and processing of animals, this company model is referred to as
The company model referred to when a large company owns or has a stake in the breeding, production, and processing of animals and is vertically integrated.
Vertically integrated companies own or control multiple stages of the supply chain, from production to distribution. In the case of animal agriculture, this could involve owning or controlling the farms where animals are raised, the processing plants where they are slaughtered and packaged, and the distribution channels that bring the products to market. This model can provide cost savings, quality control, and increased efficiency, but it has also been criticized for reducing competition and potentially harming animal welfare.
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based on a random sample of 40 employees, a 90onfidence interval for the true average annual income is (52,400, 69,200) dollars. what is the margin of error for this confidence interval?
To find the margin of error, we need to first calculate the standard error, which is given by: SE = (t-value) x (standard deviation / square root of sample size)
Since the sample size is not provided, we cannot calculate the standard error directly. However, we can use the given confidence interval to estimate the standard deviation.
The formula for a 90% confidence interval is:
Margin of error = (maximum value - minimum value) / 2
Substituting the given values, we get:
Margin of error = (69,200 - 52,400) / 2
Margin of error = 8,400
Therefore, the margin of error for this confidence interval is $8,400.
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describe highly leveraged transactions (hlts), and explain why a bank's exposure to hlts is closely monitored by regulators.
Highly Leveraged Transactions (HLTs) are defined as a single transaction or a series of related transactions with a high leverage ratio, meaning that the debt is significantly more than the equity.
HLTs are typically used in mergers, acquisitions, and investments, as they allow a company to acquire an asset with a relatively small amount of equity and a large amount of debt.
HLTs have become very popular in recent years, as they have allowed companies to make large investments with relatively little money. However, this high leverage ratio can also be very dangerous, as it can lead to large losses if the investments do not turn out as expected. This is why banks and other financial institutions must carefully monitor their exposure to HLTs.
Regulators closely monitor banks' exposure to HLTs because of the high risk associated with them. If a bank is found to have too much exposure to HLTs, regulators can take action to limit or reduce the amount of risk taken. This can include requiring banks to decrease the amount of leverage or set aside additional capital to cover potential losses. Additionally, regulators can also require banks to limit their exposure to HLTs or require them to provide additional disclosure about their investments in HLTs.
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the revenue that the government raises by printing money is calledpart 2a.a direct tax.b.seignorage.c.fiscal policy.d.an indirect tax.
The revenue that the government raises by printing money is called seigniorage.
Seigniorage refers to the difference between the face value of money (such as currency and coins) and the cost of producing it. When the government prints new money, it increases the money supply in the economy, which can lead to inflation. However, the government also benefits from the increased money supply because it can use the newly printed money to pay for its expenses, such as government programs and services. The difference between the face value of the money and the cost of producing it is the seigniorage revenue that the government earns.
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lite travel company's accounting records include the following information: payments to suppliers $ 51,000 collections on accounts receivable 83,000 cash sales 45,000 what is the amount of net cash provided by operating activities indicated by the amounts provided? multiple choice $(134,000). $96,000. $51,000. $77,000.
The amount of net cash provided by operating activities indicated by the amounts provided is $77,000.
This is calculated by adding the collections on accounts receivable and cash sales, and then subtracting the payments to suppliers. Mathematically, it can be represented as follows:
Net cash provided by operating activities = collections on accounts receivable + cash sales - payments to suppliers
Net cash provided by operating activities = $83,000 + $45,000 - $51,000
Net cash provided by operating activities = $77,000
Therefore, the correct answer is $77,000.
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what are the implications of regulation fd? reg fd prohibits a firm's managers from disclosing relevant information to individual investors earlier than institutional investors. reg fd prevents a firm's managers from disclosing relevant information to a select group of people so that no one has a comparative advantage over other investors. reg fd obliges investors to conduct independent audits before investing in a particular firm.
Regulation FD (Fair Disclosure) has several implications related to the disclosure of relevant information by firms' managers. It prohibits managers from disclosing information to individual investors before institutional investors, ensuring fairness and preventing a comparative advantage for certain investors.
Regulation FD, enacted by the U.S. Securities and Exchange Commission (SEC), aims to ensure fair and equal disclosure of material information by firms to investors. It prohibits firms' managers from selectively disclosing relevant information to individual investors or specific groups before disclosing it to the broader market or institutional investors. The regulation seeks to prevent the creation of an information advantage for a select few, promoting market transparency and integrity.
By implementing Regulation FD, the SEC aims to level the playing field for all investors. It encourages companies to adopt fair and transparent practices in disseminating information to the public. This regulation helps prevent insider trading, as all investors receive information simultaneously, reducing the risk of certain investors having an unfair advantage.
It is worth noting that Regulation FD does not impose the obligation on investors to conduct independent audits before investing in a particular firm. Instead, it focuses on the disclosure practices of firms and ensures that relevant information is disseminated in a fair and non-discriminatory manner.
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merging and acquisition represent what type of organizational change?
Merging and acquisition represent a type of organizational change known as structural change or structural reorganization.
Structural change refers to alterations in the organizational structure of a company, including its hierarchy, reporting relationships, departments, divisions, or overall composition.
and acquisition involve combining two or more separate entities into a single entity, often resulting in significant changes to the structure and operations of the organizations involved.
Mergers occur when two companies combine their assets, resources, and operations to form a new entity. Acquisitions, on the other hand, involve one company purchasing another and integrating it into its existing structure.
These changes impact various aspects of the organizations, including their management, decision-making processes, operations, culture, and overall strategic direction. The purpose of merging and acquisition can vary, such as achieving economies of scale, expanding market share, accessing new markets, diversifying product offerings, or gaining competitive advantages.
Structural changes like merging and acquisition often require careful planning, due diligence, and integration efforts to ensure a smooth transition and successful alignment of the organizations' goals, processes, and cultures. It can involve challenges such as managing employee transitions, harmonizing policies and procedures, addressing cultural differences, and integrating systems and technologies.
Overall, merging and acquisition represent significant organizational changes that reshape the structure and functioning of the entities involved, aiming to create a stronger and more competitive combined organization.
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Comprehensive worksite analysis should involve all these hazards EXCEPT:
- Existing
- Potential
- Anticipated
- Corrected
Comprehensive worksite analysis should involve all hazards except corrected. Therefore, option (D) is correct.
A comprehensive worksite analysis is an essential aspect of workplace safety. It involves identifying and assessing potential hazards that may pose a risk to the employees. The analysis should be conducted regularly to ensure that the workplace remains safe for all workers.
Some of the hazards that should be analyzed include chemical, physical, biological, and ergonomic hazards. However, some hazards may not be related to the particular workplace and should not be included in the analysis. These may include natural disasters, such as earthquakes or hurricanes, that are beyond the control of the employer.
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assume an investment has cash flows of -$39,700, $22,750, $19,500, and $14,500 for years 0 to 3, respectively. what is the npv if the required return is 10 percent? should the project be accepted or rejected?
The NPV of the investment, given cash flows of -$39,700, $22,750, $19,500, and $14,500 for years 0 to 3, respectively, and a required return of 10 percent is $6,451. Therefore, the project should be accepted.
To calculate the NPV, the cash flows for each year are discounted back to the present using the required return of 10 percent. The NPV is the sum of the discounted cash flows. In this case, the NPV can be calculated as follows:
NPV = -$39,700 / (1 + 0.10)^0 + $22,750 / (1 + 0.10)^1 + $19,500 / (1 + 0.10)^2 + $14,500 / (1 + 0.10)^3
NPV = -$39,700 + $20,682.64 + $15,498.81 + $10,770.26
NPV = $6,451.71
Since the NPV is positive, the project should be accepted. This means that the investment is expected to generate a return greater than the required return of 10 percent, and therefore, it adds value to the company.
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If Q < QBE ; there is a predictable profit. TRUE OR FALSE?
the statement "If Q < QBE ; there is a predictable profit" is FALSE.
Q represents the quantity of a product that is being produced or sold, while QBE (or the Break-Even Quantity) represents the minimum quantity of that product that needs to be produced or sold in order to cover all of the costs associated with producing and selling it.
Now, if Q is less than QBE, then the company is not producing or selling enough of the product to cover all of their costs. This means that they are operating at a loss, rather than making a profit. Therefore, the statement "If Q < QBE ; there is a predictable profit" is FALSE.
In order for a company to make a profit, they need to produce or sell more than the QBE. This allows them to cover all of their costs and have additional revenue left over, which is their profit. So, to summarize, QBE is an important metric that companies use to determine whether or not they will make a profit, and if Q is less than QBE, then the company is operating at a loss.
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when apple introduced the ipod, the company used _____, with the purpose of maximizing profitability by offering new products at a premium price.
Apple used a skimming pricing strategy when they introduced the iPod. This strategy involves setting a high price for a new product in order to maximize profits from early adopters who are willing to pay a premium price.
As the product becomes more established in the market, the price can be gradually lowered to appeal to a wider range of customers. This approach allows companies like Apple to recoup their research and development costs quickly and earn a significant profit margin.
When a business establishes a high initial price for a new product in order to capitalize on early adopters and customers ready to pay a premium for innovative products, this is known as a skimming pricing strategy. As sales start to slow down or market saturation occurs, the company may gradually lower the price to attract a wider customer base.
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All of the following are examples of sources of discretionary financing EXCEPT a. common stock. b. bank loans. c. notes payable. d. trade credit.
All of the following are examples of sources of discretionary financing, except a. common stock.
Discretionary financing refers to the funds a company has available to use at its discretion to finance its operations or investments. These funds can be generated from several sources, including common stock, bank loans, notes payable, trade credit, and other forms of financing that are not mandatory.
Common stock refers to shares of ownership that investors purchase in a company, which affords them the rights to vote on corporate decisions and receive dividends. It is not considered a discretionary source of financing since it involves the sale of ownership in the company rather than the use of discretionary funds.
On the other hand, bank loans, notes payable, and trade credit are all considered discretionary sources of financing because they provide funds that the company can choose to use as needed for its operations or investments.
In conclusion, common stock is not considered a source of discretionary financing, whereas bank loans, notes payable, trade credit, and other forms of financing are examples of discretionary financing that a company may choose to use to finance its operations or investments.
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a(n) blank culture is one in which change and renewal are a constant focus of attention. multiple choice question. enterprising entrepreneurial proactive corporate
An entrepreneurial culture is one in which change and renewal are a constant focus of attention. This type of culture is characterized by a willingness to take risks, pursue opportunities, and constantly seek out new and innovative ideas.
In an entrepreneurial culture, employees are encouraged to be creative, independent thinkers who are not afraid to challenge the status quo. This type of culture is often associated with start-ups and small businesses, but it can also be found in larger organizations that embrace a more entrepreneurial mindset. By promoting a culture of entrepreneurship, companies can foster a sense of ownership and accountability among employees, leading to increased productivity, innovation, and growth.
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ford is the sole proprietor of go, a game app subscription service. as a sole proprietor, on the business’s profits, ford pays
As the sole proprietor of Go, a game app subscription service, Ford is responsible for all aspects of the business, including finances. When it comes to the business's profits, Ford will have to pay taxes on the income earned.
However, the amount that he pays in taxes will depend on several factors, such as the size of the business, the revenue earned, and the applicable tax laws.
Sole proprietors are considered self-employed individuals, meaning they are responsible for reporting and paying taxes on all income earned from their business. The profits generated by Go would be subject to self-employment tax, which is a tax on net earnings from self-employment. Additionally, Ford may also be required to pay state and federal income taxes on the business's profits.
It is important for Ford to keep accurate financial records and consult with a tax professional to ensure that he is paying the correct amount of taxes and taking advantage of any deductions or credits that may be available to him. As a sole proprietor, he has complete control over the business's finances, but with that comes the responsibility of managing them effectively and ensuring compliance with tax laws.
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What is private placement of securities? Multiple Choice 1. A procedure that allows a company to register securities and then sell them over a period of two years without reregistering. 2. A procedure that allows the sale of securities to no more than 35 sophisticated knowledgeable investors, with no general solicitation allowed. 3. A method of filing Form 10-K with the SEC. 4. The registration of mutual funds that engage in investing and trading securities. 5. A sale of securities to no more than 50 accredited investors, with no general solicitation allowed.
Private placement of securities is a procedure that allows the sale of securities to no more than 35 sophisticated knowledgeable investors, with no general solicitation allowed.
Private placement of securities refers to the offering and sale of securities to a limited number of qualified investors, such as institutional investors, accredited investors, or sophisticated individuals. This method is exempt from the requirement of registering the securities with the Securities and Exchange Commission (SEC) and allows companies to raise capital without going through a public offering. In a private placement, there are restrictions on the number and type of investors, and general solicitation or advertising to the public is not allowed.
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consider derek's budget information: materials to be used total $64,200; direct labor totals $201,600; factory overhead totals $403,000; work in process inventory on january 1 is $185,800; and work in progress inventory on december 31 is $191,200. the budgeted cost of goods manufactured for the year is
The budgeted cost of goods manufactured for the year is $664,400.
To calculate the budgeted cost of goods manufactured for the year, we need to consider the direct costs associated with production. These include materials, direct labor, and factory overhead.
The formula to calculate the cost of goods manufactured is:
Cost of Goods Manufactured = Beginning Work in Process Inventory + Total Manufacturing Costs - Ending Work in Process Inventory
Given the information provided:
Beginning Work in Process Inventory = $185,800
Materials = $64,200
Direct Labor = $201,600
Factory Overhead = $403,000
Ending Work in Process Inventory = $191,200
Let's calculate the cost of goods manufactured:
Cost of Goods Manufactured = $185,800 + ($64,200 + $201,600 + $403,000) - $191,200
Cost of Goods Manufactured = $185,800 + $669,800 - $191,200
Cost of Goods Manufactured = $664,400
Therefore, the budgeted cost of goods manufactured for the year is $664,400.
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changes in business inventories are excluded from the definition of investment in the national income accounts. True/False
Changes in business inventories are not excluded from the definition of investment in the national income accounts, but are in fact included as part of the broader definition of investment.false.
changes in business inventories are actually included in the definition of investment in the national income accounts. in the context of the national income accounts, investment refers to spending on capital goods such as machinery, equipment, and structures, as well as changes in business inventories.
changes in business inventories are included in investment because they represent a change in the stock of goods that businesses hold for sale or for use in production. when businesses increase their inventories, they are effectively investing in the production and sale of goods in the future. conversely, when businesses decrease their inventories, they are reducing their investment in future production and sales.
changes in inventories are captured in the national income accounts through the calculation of gross private domestic investment (gpdi), which includes spending on fixed investment (such as machinery and equipment) as well as changes in business inventories.
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Treasury bonds are government securities that have a 20-year or 30-year term, and they pay a fixed interest rate on a semi-annual basis.
True. Treasury bonds are issued by the US government and have a term of either 20 years or 30 years.
They are considered a long-term, low-risk investment and are popular with investors who are seeking a stable source of income over an extended period of time. Treasury bonds pay a fixed interest rate, known as the coupon rate, on a semi-annual basis. The interest rate on Treasury bonds is determined by the prevailing market interest rates at the time of issuance, and it remains fixed throughout the life of the bond. At maturity, the US government pays the bondholder the face value of the bond. Treasury bonds are backed by the full faith and credit of the US government, which makes them one of the safest investments available.
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who said because the man who makes an appearance in the business world, the man who creates personal intrest, is the man who gets ahead. be liked and you will never want
The quote "Because the man who makes an appearance in the business world, the man who creates personal interest, is the man who gets ahead. Be liked and you will never want" is attributed to Willy Loman, the fictional character from the play "Death of a Salesman" by Arthur Miller.
This quote reflects Willy's belief that personal relationships and likability are crucial for success in the business world. Willy Loman is a salesman who holds onto the idea that popularity and charisma are key to achieving prosperity and fulfillment. However, the play explores the consequences of Willy's flawed beliefs and the detrimental effects of pursuing shallow ideals in the pursuit of success.
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A basic concept in finance is that investors who dislike risk (they are risk averse) will take on financial risk only if they:1) expect to receive the risk-free rate of return.2) expect to receive a fair return for the risk taken.3) expect to receive negative cash flows.4) expect free cash flow to be zero.
The correct option is 2). A basic concept in finance is that investors who dislike risk (they are risk averse) will take on financial risk only if they expect to receive a fair return for the risk taken.
Risk-averse investors are those who are not willing to take on financial risk unless they receive a fair return for the risk taken. This means that investors require compensation for bearing risk in the form of a higher expected return. The fair return is the return that investors require to compensate them for the risk taken.
For example, if an investor is considering investing in a high-risk investment such as a startup company, they will only be willing to do so if they expect to receive a fair return for the risk taken. The fair return would be higher than the risk-free rate of return because the investment is riskier than a risk-free investment such as a government bond.
A basic concept in finance is that risk-averse investors require a fair return for the risk taken. This means that investors will only take on financial risk if they expect to receive compensation in the form of a higher expected return to compensate them for the risk taken.
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When considering the impact of distress costs on capital structure, which of the following facts should lead ABC Corporation to set a higher target debt ratio than XYZ Corporation (all else equal)?
A. ABC's cash flows from operations are less volatile than XYZ's.
B. ABC is a computer software firm, and XYZ is an electric utility.
C. ABC operates in a more competitive industry than XYZ.
D. ABC's assets have lower resale values than XYZ's assets.
The correct answer is D. When considering the impact of distress costs on capital structure, ABC Corporation should set a higher target debt ratio than XYZ Corporation if ABC's assets have lower resale values than XYZ's assets.
This is because in the event of financial distress, ABC would face higher costs to sell its assets to pay off its debt, making it more risky to take on high levels of debt. On the other hand, XYZ's assets would have higher resale values, making it less risky to take on high levels of debt.
The other options, such as cash flow volatility, industry competition, and firm type, are not directly related to distress costs and do not necessarily impact a firm's target debt ratio.
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the primary purpose of strategy is to: a. maximize profits b. set and achieve long-term goals c. satisfy customers d. minimize input costs
The primary purpose of strategy is to (option) b. set and achieve long-term goals.
A strategy is a plan or course of action designed to achieve a long-term goal or set of goals under conditions of uncertainty. Its primary purpose is to help an organization achieve its desired outcomes by providing a clear direction and focus for its resources and efforts. By setting long-term goals and objectives, an organization can create a roadmap for success that guides decision-making and resource allocation. A well-crafted strategy takes into account an organization's strengths and weaknesses, its competitive environment, and market trends to develop a plan of action that positions it for long-term success. Ultimately, the success of a strategy depends on the ability of an organization to execute it effectively, adapt to changing circumstances, and continuously evaluate and improve its approach.
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relevant costs are often referred to as: multiple choice unavoidable costs. differential costs. sunk costs. all of these answers are correct.
Relevant costs refer to costs that are directly related to a particular decision. These costs are important because they influence the outcome of the decision-making process. Relevant costs can be either avoidable costs or differential costs. Avoidable costs are costs that can be eliminated if a particular decision is made. Differential costs, on the other hand, are costs that differ between two or more alternatives. They are important because they provide information on the differences between two or more alternatives, which can be used to make an informed decision.
It is important to note that relevant costs are not sunk costs. Sunk costs are costs that have already been incurred and cannot be recovered, regardless of the decision made. These costs should not be considered when making a decision because they are not relevant to the future.
In summary, relevant costs are often referred to as differential costs because they highlight the differences between alternatives, which is important for decision-making. They are not sunk costs, which are irrelevant to future decisions.
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March 1 Established a petty cash fund of $643.March 31 The amount of cash in the petty cash fund is now $496. The fund is replenished based on the following receipts: office supplies, $39; selling expenses, $113.Required:Journalize the entries to record the above transactions. Record any discrepancy in the cash short and over account. Refer to the Chart of Accounts for exact wording of account titles.
The discrepancy is $(-5), which is recorded as a Cash Short and Over.
Here are the entries based on the given transactions:
March 1:
Petty Cash $643
Cash $643
(To establish a petty cash fund)
March 31:
Office Supplies $39
Selling Expenses $113
Cash Short and Over $(-5)
Cash $147
(To replenish the petty cash fund and record the discrepancy)
Note: The discrepancy was calculated as the difference between the original petty cash amount ($643) and the sum of the remaining cash ($496) and the replenishment amount ($39 + $113 = $152). This gives a discrepancy of $643 - $496 - $152 = $(-5), which is recorded as a Cash Short and Over.
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