Answer:
b. during times of normal market conditions.
Explanation:
Using a value at risk (VaR) model based on historical data to forecast future expected losses works well: "during times of normal market conditions."
The above statement is true because VaR regardless of the models does not measure the drastic or uncertain situation. Also given that it is used based on historical data, then it is believed to work better on the assumption of normal circumstances.
Explain characteristics of a business?
Answer:
Self made
Explanation:
True or False: In general, term loans may be created and modified more easily than bond issues because (1) there are fewer parties to the transaction, and (2) the borrower and the lender have the potential to meet directly to reach mutually agreeable terms.
Answer:
False
Explanation:
A term loan can be regarded as monetary loan which is expected to be repaid on regular payments basis over particular period of time. Term loans are one that the lasting duration is
usually between one and ten years, and in some cases could last as long as 30 years . It is a loan that usually encompass unfixed interest rate which could add additional balance to the amount be repaid.
Consider the following transactions for
BigGuy Toys:
Apr. 7 BigGuy Toys purchased $198,800 worth of MegoBlock toys on account with credit terms of 2/10, n/60.
Apr. 13 BigGuy Toys returned $19,800 of the merchandise to MegoBlock due to damage during shipment.
Apr. 15 BigGuy Toys paid the amount due, less the return and discount.
Required:
a. Journalize the purchase transactions. Explanations are not required.
b. In the final analysis, how much did the inventory cost BigGuy Toys?
Answer and Explanation:
a. The journal entries are shown below:
On April 7
Merchandise inventory $198,800
To Account payable $198,800
(being the inventory purchase on account)
On April 13
Account payable $19,800
To Merchandise inventory $19,800
(Being returned inventory is recorded)
On April 15
Account payable ($198,800 - $19,800) $179,000
To Cash (98% of $179,000) $175,420
To Merchandise inventory $3,580
(being the amount paid is recorded)
b. The inventory cost should be $175,420
Suppose that the turkey industry is in long-run equilibrium at a price of $5 per pound of turkey and a quantity of 400 million pounds per year. Suppose that WebMD claims that a protein found in turkey will increase your expected lifespan by 2 years. WebMD's claim will cause consumers to demand _____________turkey at every price.
Answer:
The "WebMD's claim will cause consumers to demand ______more_______turkey at every price."
Explanation:
Consumers will tend to demand more turkey in order to increase their expected lifespan by 2 years by consuming more of the protein found in turkey as claimed by WebMD. This implies that there will a new equilibrium as the old equilibrium shifts outward to match the increased demand by consumers of turkey. This claim may trigger demand and supply to exceed the annual 400 million pounds equilibrium at $5 per pound.
SOX requires the Chief Executive Officer (CEO) and which corporate officer to certify the accuracy of the financial statements?
Answer:
SOX requires the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) to certify the accuracy of the financial statements.
Explanation:
This requirement ensures the public accountability of the top chief executive officers of publicly-traded companies. The CEO is at the helm of affairs of the company, while the CFO has responsibility for the financial records, which produced the financial statements. This is the reason that the two top managers are required to sign off the financial statements, thus, vouching their accuracy.
Accompanying a bank statement for Marsh Land Properties is a credit memo for payment on a $15,000 1-year note receivable and $900 of interest collected by the bank. Marsh Land Properties has been notified by the bank at the time of collection, but had made no entries.
Required:
Journalize the entry that should be made by Marsh Land to bring the accounting records up to date.
Answer:
Dr Cash $15,900
Cr Notes Receivable $15,000
Cr Interest Revenue $900
Explanation:
Preparation of the journal entry that should be made by Marsh Land to bring the accounting records up to date.
Dr Cash $15,900
($15,000+$900)
Cr Notes Receivable $15,000
Cr Interest Revenue $900
On January 1, Year 1, a contractor began work on a $3.2 million construction contract that is expected to be completed in 3 years. The contractor concludes that it is appropriate to recognize revenue over time using the input method based on costs incurred (cost-to-cost method). At the inception date, the estimated cost of construction was $2.4 million. The following data relate to the actual and expected construction costs:
Year 1 Year 2 Year 3
Cost incurred $720,000 $1,170,000 $1,110,000
Expected future costs $1,680,000 $810,000 $0
For this long-term construction contract, the contractor needs to calculate the estimated dollar values of the revenue and gross profit (loss) to be recognized each year.
Complete the contractor's long-term construction contract using the information above.
Revenue Gross Profit (loss)
Year 1
Year 2
Year 3
Answer:
Contractor's Long-term Construction Contract Table:
Revenue Gross Profit (loss)
Year 1 $960,000 $240,000
Year 2 $1,386,667 $216,667
Year 3 $853,333 ($256,667)
Total $3,200,000 $200,000
Explanation:
a) Data and Calculations:
Contract price = $3.2 million
Estimated cost of construction = $2.4 million
Actual and expected construction costs:
Year 1 Year 2 Year 3
Cost incurred $720,000 $1,170,000 $1,110,000
Expected future costs $1,680,000 $810,000 $0
Revenue $
Year 1 = $720,000/$2,400,000 * $3.2 million = $960,000
Year 2 = $1,170,000/$2,700,000 * $3.2 million = $1,386,667
Year 3 = $853,333
Revenue Gross Profit (loss)
Year 1 $960,000 $240,000 ($960,000 - $720,000)
Year 2 $1,386,667 $216,667 ($1,386,667 - $1,170,000)
Year 3 $853,333 ($256,667) ($853,333 - $1,110,000)
Total $3,200,000 $200,000 ($3,200,000 - $3,000,000)
In order to calculate the amount of money needed to maintain a standard of living 20 years from now, you attempt to calculate an FV (20 years from now) of today's living expenses. What would be most appropriate for you to use as the interest rate?
Money market rate
Expected inflation rate
Average market rates of return
Average market return + inflation
Answer:
Expected inflation rate
Explanation:
Expected Inflation rate would be the most appropriate rate to use as interest rate in the calculation because it gives a somewhat accurate picture of how prices will behave in the coming years, and therefore, of how cost of living will evolve, and how much money will be needed to maintain your living standards 20 years from now.
Expected inflation is never a completely accurate measure though, and it can be sensitive to economic or political shocks, so it should be used with caution and keeping that in mind.
A new accountant working for Metcalf Company records $800 Depreciation Expense on store equipment as follows:
Dr. Depreciation Expense 800
Cr. Cash 800
The effect of this entry is to:__________
a. Understand the book of the value of depepreciable assets as of December 31.
b. adjust the accounts to their proper amounts on December 31.
c. understand total assets on the balance sheet as of December 31.
d. overstate the book value of the depreciation assets at December 31,
Answer:
sorrryyyyyyyyyysorrryyyyyyyyyysorrryyyyyyyyyy
Suppose a newly elected president cuts taxes by 20 percent: i. Assuming that the money supply is held constant, what are the new equilibrium interest rate and income
Answer: hello your question has some missing information below is the missing information
An economy is initially described by the following equations:
C = 80 + 0.8(Y – T)
I = 120 –5r
M/P = Y – 25r
G = 100
T = 100
M = 2,700
P = 3
answer :
equilibrium interest rate ( r ) = 5.6%
equilibrium level of income = 1040
Explanation:
a) New equilibrium interest rate
T = 100 - 20/100 ( 100 ) = 80
Y = C + I + G
= 80 + 0.8( y - 80 ) + 120 - 5r + 100
= 236 + 0.8y - 5r
y = 1180 - 25r ------ ( 1 )
M/P = Y - 25r = 2700 / 3
y = 900 + 25r ------- ( 2 )
equate; equation ( 1 ) and equation ( 2 )
1180 - 25r = 900 + 25r
∴ r = 5.6%
b) Equilibrium level of Income
To determine Equilibrium level of income we will use equation2
Y = 900 + 25(5.6) = 1040
The following data relate to Lebeaux Corporation for the year just ended: Sales revenue $ 750,000 Cost of goods sold: Variable portion 370,000 Fixed portion 110,000 Variable selling and administrative costs 50,000 Fixed selling and administrative cost 75,000 Which of the following statements is correct?
A) Lebeaux's variable-costing income statement would show a gross margin of $270,000.
B) Lebeaux's variable costing income statement would show a contribution margin of $330,000.
C) Lebeaux's absorption-costing income statement would show a contribution margin of $330,000.
D) Lebeaux's absorption costing income statement would show a gross margin of $330,000.
E) Lebeaux's absorption-costing income statement would show a gross margin of $145,000.
Answer:
B) Lebeaux's variable costing income statement would show a contribution margin of $330,000.
Explanation:
See below the Statements that are produced under Absorption and Variable Costing methods.
Absorption Costing
Sales revenue $750,000
Less Cost of goods sold :
Variable portion $370,000
Fixed portion $110,000 ($480,000)
Gross Profit $270,000
Variable Costing
Sales revenue $750,000
Less Variable Costs :
Variable portion - Cost of Sales $370,000
Variable selling and administrative costs $50,000 ($420,000)
Contribution $330,000
therefore,
The only correct statement is : Lebeaux's variable costing income statement would show a contribution margin of $330,000
Lemon Corporation purchased a truck at the beginning of 2017 for $109,200. The truck is estimated to have a salvage value of $4,200 and a useful life of 120,000 miles. It was driven 21,000 miles in 2017 and 29,000 miles in 2018. What is the depreciation expense for 2017
Answer:
the depreciation expense for 2017 is $18,375
Explanation:
The computation of the depreciation expense for 2017 is shown below:
= (Truck cost - salvage value) ÷ useful life in miles × driven miles in year 2017
= ($109,200 - $4,200) ÷ 120,000 miles × 21,000 miles
= $18,375
Hence, the depreciation expense for 2017 is $18,375
Therefore the above formula should be applied for the same
Earning a promotion is made easier if you know the ______.
a. First and last name of your supervisor
b.Password to your company’s database is
c.Kind of characteristics your company values
d.Lunch order your supervisor favors
Answer:
c
Explanation:
Mcdormand inc reported a 3400 unfavorable price variance for variable overhead and a $34,000 nfavorable price variance for fixed overhead. The flexible budget had variable overhead based on 36,100 direct labor-hours; only 34,100 hours were worked. Total actual overhead was $1,810,400. The number of estimated hours for computing the fixed overhead application rate totaled 37,500 hours.
Required:
a. Prepare a variable overhead analysis.
b. Prepare a fixed overhead analysis.
Answer:
A. Variable overhead price variance 3400 U
Variable overhead efficiency variance 60000 F
Variable overhead cost variance 56600 F
B. Fixed overhead price variance 34000 U
Production volume variance 28000 U
Fixed overhead cost variance 62000 U
Explanation:
a. Preparation of a variable overhead analysis.
Variable overhead price variance = 3400 U
Calculation for Variable overhead efficiency variance
First step is to calculate the Actual input at standard rate
Actual input at standard rate = (34100*30)
Actual input at standard rate= 1023000
Second step is to calculate the Standard rate
Standard rate = 1083000/36100
Standard rate=30
Now let calculate Variable overhead efficiency variance
Variable overhead efficiency variance = (1083000-1023000)
Variable overhead efficiency variance = 60000 F
Calculation for Variable overhead cost variance
Variable overhead cost variance = (60000-3400)
Variable overhead cost variance= 56600 F
Therefore the variable overhead analysis will be:
Variable overhead price variance 3400 U
Variable overhead efficiency variance 60000 F
Variable overhead cost variance 56600 F
b. Preparation of a fixed overhead analysis.
Fixed overhead price variance = 34000 U
Calculation for Production volume variances
First step is to calculate Actual input at standard rate
Actual input at standard rate= 34100*30
Actual input at standard rate= 1023000
Second step is to calculate Fixed overhead actual
Fixed overhead actual= 1810400-(1023000+3400)
Fixed overhead actual= 784000
Third step is to calculate Budgeted fixed overhead
Budgeted fixed overhead = (784000-34000)
Budgeted fixed overhead = 750000
Fourth step is to calculate Fixed overhead applied
Fixed overhead applied= (750000/37500)*36100
Fixed overhead applied= 722000
Now let calculate Production volume variance
Production volume variance = (750000-722000) Production volume variance= 28000 U
Calculation to determine Fixed overhead cost variance
Fixed overhead cost variance = (28000+34000) Fixed overhead cost variance= 62000 U
Therefore fixed overhead analysis will be:
Fixed overhead price variance 34000 U
Production volume variance 28000 U
Fixed overhead cost variance 62000 U
On June 30, 2009, Apricot Co. paid $5,000 cash for management services to be performed over a two-year period. Apricot follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The adjusting entry on December 31, 2009 for Apricot would include:
Answer:
A debit to Management Services Expense for $1,250.
Explanation:
The adjusting entry for apricot would include that
There is a debit to the Management Services Expense for
= $5,000 ÷ 2 years × 6 months ÷ 12 months
= $1,250
Hence, the adjusting entry for apricot would include a debit to the Management Services Expense for $1,250
The same should be considered and relevant
Jerry's Flowers had the following cost information related to its purchases of merchandise. Calculate the total cost of merchandise purchased using the information below: Invoice cost of merchandise purchases $100,000 Purchase discounts received $ 9,000 Cost of transportation-in (shipping) $ 500 Costs of purchase returns and allowances $ 400
Answer:
$91,100
Explanation:
Calculation to determine the total cost of merchandise purchased
Using this formula
Total cost of merchandise purchased = Invoice cost of merchandise purchases + Cost of transportation in - Purchase returns and allowances - Purchase discount
Let plug in the formula
Total cost of merchandise purchased= $100,000 + $500 - $400 - $9,000
Total cost of merchandise purchased= $91,100
Therefore the total cost of merchandise purchased is $91,100
According to rational expectations theory, Question 7 options: every day is a new day and yesterday's occurrences have no bearing on today's decisions. when making decisions a person will consider only information based on past experience. even though a person considers information related to future events as potentially important for decision making, he realizes that such information is unreliable and worthless. past experience is a good guide for decision making, but so is information related to possible future outcomes.
Answer:
past experience is a good guide for decision making, but so is information related to possible future outcomes.
Explanation:
The rational expectations theory refer to a concept and modeling technique that is applied widely in macroeconomics. In this the individual depend their decision on three main factors i.e. human rationality, available information and the past experience
As per the rational expectations theory the future should always be taken in expectation with regard to the decisions and it is vital for the same.
So as per the given situation, the above should be the answer
Which printing method is best for Bath Bomb Container?
Answer:
One of the most typical methods for Custom Bath Bomb Container is flexographic and offset printing. https://custompackagingpro.com/product/custom-printed-bath-bomb-packaging-boxes
Time value of money calculations can be solved using a mathematical equation, a financial calculator, or a spreadsheet. Which of the following equations can be used to solve for the future value of an ordinary annuity?
1) PMT x {1 – [1/(1 + r)nn]}/r
2) PMT x {[(1 + r)nn – 1]/r}
3) FV/(1 + r)nn
4) PMT x {[(1 + r)nn – 1]/r} x (1 + r)
Answer:
b. PMT x {[(1 + r)nn – 1]/r}
Explanation:
The formula that should be calculated for the future value of an ordinary annuity is shown below:
= PMT × {[(1 + r)^n - 1] ÷ r}
Here
PMT denotes the coupon payment
r denotes the rate of interest
n denotes the time period
So as per the given situation, the option b is correct
Wesley lives in a country with little protection under the law for conducting business or bringing his ideas about a revolutionary new car tire to the market with patent production. Because of the economic conditions what will Wesley most likely do?
A) Develop his tire and bring it to market with ease and minimal cost.
B) Find a country where he can develop his tire idea and have it protected under strong patent laws.
C) Keep his ideas in a notebook and sell them to the highest bidder.
Answer:
B
Explanation:
Patents are a right granted to an inventor to exclusively sell a product for a specific period of time usually for 20 years. During this period, others are prevented from making, using, or selling the invention.
Types of patents include:
1. utility patents
2. design patents
3. plant patent
Because Wesley's country does not have a strong patent law, the best option for Wesley is to move to a country with strong patent laws so his invention can be protected.
XYZ Company uses a weighted-average process costing system. All materials at XYZ are added at the end of the production process. Equivalent units for materials at XYZ would be equal to:
Answer:
Equivalent units for materials at XYZ would be equal to the addition of units in beginning work in process and the units started.
Explanation:
A weighted-average process costing system refers to a process costing system in which expenses are averaged out and applied evenly to both units transferred out and units in ending work in process.
An equivalent unit of production is a measurement of the amount of work done by a manufacturer on partially completed units of output at the end of a fiscal period. In general, fully completed units and partially completed units are expressed as fully completed units.
When a weighted-average process costing system is being used, the equivalent units is obtained as the addition of units in beginning work in process and the units started.
Therefore, equivalent units for materials at XYZ would be equal to the addition of units in beginning work in process and the units started.
Identify whether a debit or credit results in the indicated change for each of the following accounts.
a. To increase Land
b. To decrease Cash
c. To increase Fees Earned (Revenues)
d. To increase Office Expense
e. To decrease Unearned Revenue
f. To decrease Prepaid Rent
g. To increase Notes Payable
h. To decrease Accounts Receivable
i. To increase Common Stock
j. To increase Store Equipment
Answer:
a. To increase Land - Debit
b. To decrease Cash - Credit
c. To increase Fees Earned (Revenues) - Credit
d. To increase Office Expense - Debit
e. To decrease Unearned Revenue - Debit
f. To decrease Prepaid Rent - Credit
g. To increase Notes Payable - Credit
h. To decrease Accounts Receivable - Credit
i. To increase Common Stock - Credit
j. To increase Store Equipment - Debit
Explanation:
Debit gives details of spending, sum owed , amount to balance which is usually recorded to the left side of an account entry book while credit gives the details of income, amount earned or made on sale, spending cut and revenue and is usually placed to the right hand column of an account entry.
Karr, Inc., reported net income of $300,000 for 2011. Changes occurred in several balance sheet accounts as follows:
Equipment $25,000 Increase
Inventories $20,000 decrease
Accumulated depreciation 40,000 Increase
Accounts receivable 15,000 Increase
Note payable 30,000 increase
Accounts payable 5,000 decrease
Additional Information:
a. During 2011 Karr sold equipment costing $25,000, with accumulated depreciation of $12,000, for a gain of $5,000.
b. In December 2011 Karr purchased equipment costing $50,000, with $20,000 cash and a 12% note payable of $30,000.
c. Depreciation expense for the year was $52,000.
Required:
1. In Karr’s 2011 statement of cash flows, calculate net cash provided by operating activities.
2. In Karr’s 2011 statement of cash flows, calculate net cash used in investing activities.
Answer:Cash flow from operating activities = $347,000
Net cash used in Investing:= -$2,000
Explanation:
1.
The net cash provided by operating activities by Karr, Inc., reported in 2011
Account Titles and explanation Amount
Net income $300,000
Adjustments made
Add:
Depreciation expense $52,000
Decrease in inventory $20,000
Less:
Increase in account receivable -$15,000
Decrease in account payable -$5,000
Gain on sale of equipment -$5,000
Cash flow from operating activities $347,000
2. Net cash used in Investing:
Sales of equipment =cost -depreciation + gain of sale
Sales of equipment 18,000(($25,000-$12,000+$5,000)
Purchase of Equipment 20,000
Net cash used in Investing:= -$2,000
6. Guillermo and Nora adopted a little boy in 2020 and incurred a total of $18,000 qualified adoption expenses. Their modified AGI is $220,000. What is the amount of adoption credit they can take
Answer:
Guillermo and Nora
The amount of adoption credit that they can take is limited to:
= $14,300 in 2020.
Explanation:
a) Data and Calculations:
Modified AGI of Guillermo and Nora = $220,000
Total amount of qualified adoption expenses incurred in 2020 = $18,000
Limit of adoption credit available to the couple in 2020 = $14,300
Lost adoption expenses = $3,700 ($18,000 - $14,300)
b) The couple will not be able to take adoption credit amounting to $3,700 because the amount they spent on adoption expenses exceeded the adoption credit limit for 2020.
hester Corp. ended the year carrying $18,711,000 worth of inventory. Had they sold their entire inventory at their current prices, how much more revenue would it have brought to Chester Corp.
Answer:
$18,711,000
Explanation:
Based on the information given the amount of more revenue would it have brought to Chester Corp will be $18,711,000
Instead of investing a lump of sum of $25000,Brittany Royer decides to svae the money in a vault for 2years. Assuming the inflation being 2.5%per year,how much will her purchasing power decline in 2years
Answer:
$1265.63
Explanation:
Inflation is a persistent rise in the general price levels
Types of inflation
1. demand pull inflation – this occurs when demand exceeds supply. When demand exceeds supply, prices rise
2. cost push inflation – this occurs when the cost of production increases. This leads to a reduction in supply. Higher prices are the resultant effect
Loss in purchasing value = future value of the amount saved - amount saved
The formula for calculating future value:
FV = P (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
$25000 (1.025)² = $26.265.625
Amount lost = $26.265.625 - $25,000 = $1265.63
Best Brands Appliance Mart is getting ready for its annual Labor Day sale. There are two Best Brands stores, one in midtown Manhattan and another in Amityville. Merchandise is stored in two warehouses, one in Brooklyn and one in Baldwin. From experience in past years, the owners know the big mover during the sale is tablets. The Manhattan store needs 500, while the Amityville store will require 400. Each warehouse has 600 tablets in stock. It costs $1 and $2 to ship a tablet from Brooklyn to Manhattan and to Amityville, and $2 and $4 to ship one from Baldwin to Manhattan and Amityville. What is the best shipping strategy for getting the tablets from the warehouses into the stores to minimize the shipping cost?
Answer:
Explanation:
From the given information:
Assuming we represent x to be the tablets sent from Brooklyn to Manhattan
Thus, (500 - x) to be the tablets sent from Baldwin to Manhattan
Also, suppose we represent y to be the tablets sent from Brooklyn to Amityville
It implies that (400 - x) to be the tablets sent from Baldwin to Amityville
∴
x ≥ 0 ; y ≥ 0
⇒ 500 - x ≥ 0 & 400 - y ≥ 0
The Shipping cost Z = 1(x) + 2(500-x) + 2(y) + 4(400-y)
Z = x + 1000 - 2x + 2y + 1600 - 4y
Z = x -2y + 2600
To minimize the shipping cost:
[tex]\left \{ 500-x \geq 0 \ \implies \ x\leq 500}} \atop {400-y \geq 0 \ \implies \ y\leq 400}} \right.[/tex]
Thus, by replacing the coordinate values (x,y) into Z, we have:
Point Coordinates(x,y) Value of Z (shipping cost)
0 (0,0) 0
A (0,400) 1800
B (500,400) 1300
C (500,0) 2100
Hence, the minimum cost is 1300.
x = 500 units and y = 400 units
In 2008, 1 Swiss franc cost .56 British pounds and in 2010 it cost .51 British pounds in 2010. How much would 1 British pound purchase in Swiss francs in 2008 and 2010
Answer:
1.78 Swiss franc
1.96 Swiss franc
Explanation:
Below is the calculation:
In the year 2008, 1 Swiss franc cost = 0.56 British pounds
In the year 2010, 1 Swiss franc cost = 0.51 British pounds
Now calculate the Swiss frac purchase by 1 bristish pound.
In the year 2008, 1 British pound will purchase = 1 / 0.56 = 1.78 Swiss franc
In the year 2010, 1 British pound will purchase = 1 / 0.51 = 1.96 Swiss franc
Periodic inventory by three methods The beginning inventory for Midnight Supplies and data on purchases and sales for a three-month period are shown below:
Number
Date Transaction of Units Per Unit Total
Jan. 1 Inventory 7,500 $75.00 10
Purchase 85.00 22,500 11,250
28 Sale $562,500 1,912,500 1,687,500
562,500 150.00 30 Sale 3,750 150.00
Feb. 5 Sale 1,500 150.00 225,000
10 Purchase 54,000 87.50 4,725,000
16 Sale 27,000 160.00 4,320,000
28 Sale 25,500 160.00 4,080,000
Mar. 5 Purchase 45,000 89.50 4,027,500
14 Sale 30,000 160.00 4,800,000
25 Purchase 7,500 90.00 675,000
30 Sale 26,250 160.00 4,200,000
1. Determine the inventory on March 31 and the cost of merchandise sold for the three-month period, using the first-in, first-out method and the periodic inventory system.
2. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system.
3. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system.
4. Compare the gross profit and the March 31 inventories, using the following column headings.
Answer:
1. We have:
Inventory on March 31 = $1,010,625
Cost of merchandise sold for the three-month period = $10,891,875
2. We have:
Inventory on March 31 = $881,250
Cost of merchandise sold for the three-month period = $11,021,250
3. We have:
Inventory on March 31 = $980,975.27
Cost of merchandise sold for the three-month period = $10,921,524.73
4. We have:
Details FIFO LIFO Weighted Average
$ $ $
Sales 19,875,000 19,875,000 19,875,000
Cost of Goods sold (10,891,875) (11,021,250) (10,921,525)
Gross Profit 8,983,125 8,853,750 8,953,475
Inventory, March 31 1,010,625 881,250 980,975
Explanation:
1. Determine the inventory on March 31 and the cost of merchandise sold for the three-month period, using the first-in, first-out method and the periodic inventory system.
Note: See part 1 of the attached excel file for the determined inventory on March 31 and the cost of merchandise sold for the three-month period, using the first-in, first-out method and the periodic inventory system.
From the part 1 of the attached excel file, we have:
Inventory on March 31 = $1,010,625
Cost of merchandise sold for the three-month period = $10,891,875
2. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system.
Note: See part 2 of the attached excel file for the determined inventory on March 31 and the cost of merchandise sold for the three-month period, using the last-in, first-out method and the periodic inventory system.
From the part 2 of the attached excel file, we have:
Inventory on March 31 = $881,250
Cost of merchandise sold for the three-month period = $11,021,250
3. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system.
Note: See part 3 of the attached excel file for the determined inventory on March 31 and the cost of merchandise sold for the three-month period, using the weighted average cost method and the periodic inventory system.
From the part 3 of the attached excel file, we have:
Inventory on March 31 = $980,975.27
Cost of merchandise sold for the three-month period = $10,921,524.73
4. Compare the gross profit and the March 31 inventories, using the following column headings.
Details FIFO LIFO Weighted Average
$ $ $
Sales 19,875,000 19,875,000 19,875,000
Cost of Goods sold (10,891,875) (11,021,250) (10,921,525)
Gross Profit 8,983,125 8,853,750 8,953,475
Inventory, March 31 1,010,625 881,250 980,975
AG Inc. made a $25,000 sale on account with the following terms: 1/15, n/30. If the company uses the gross method to record sales made on credit, what is the journal entry to record the sale
Answer:
Debit : Accounts Receivable $25,000
Credit : Sales Revenue $25,000
Explanation:
The journal entry to record the sale would include a Debit to Asset Account - Accounts Receivable and Credit to Sales Revenue at the amount of sale including the cash discount.