8 points eBook HintPrintReferences Check my work Check My Work button is now enabledItem 4Item 4 8 points The following information is from Amos Company for the year ended December 31, 2019. Retained earnings at December 31, 2018 (before discovery of error), $852,000. Cash dividends declared and paid during the year, $13,000. Two years ago, it forgot to record depreciation expense of $44,600 (net of tax benefit). The company earned $219,000 in net income this year. Prepare a statement of retained earnings for Amos Company. (Amounts to be deducted should be indicated with a minus sign.)

Answers

Answer 1

Answer:

Amos Company

Statement of Retained Earnings for the year ended December 31, 2019:

December 31, 2018 balance             $852,000

adjustment of error:

Depreciation expense for 2017           -44,600

Adjusted Retained Earnings             $807,400

Income for the year                             219,000

less Dividends                                      -13,000

Retained Earnings, Dec. 31, 2019  $1,013,400

Explanation:

The depreciation expense of $44,600 would be recorded by deducting it from the beginning retained earnings.  This adjusts the balance to reflect the previous year's errors.  Then the year's earnings are added before the payment of dividends.  The resultant figure is the retained earnings to be carried to the next accounting period.


Related Questions

Beatrice invests $1,320 in an account that pays 4 percent simple interest. How much more could she have earned over a 5-year period if the interest had been compounded annually

Answers

Answer:

How much more earned is $21.98

Explanation:

Calculation of the amount earned when investment in paying on simple interest

Interest = Amount  * Interest rate * No of years

Interest = 1320 * 4% * 5

Interest = $264

Total amount = Interest + Amount invested

Total amount = $1320 + 264

Total amount = $1,584

Therefore, the total amount earned when earning on simple interest of 4% is $1,584

Calculation of the amount earned when investment interest in paying compounded annually

Pv= 1320

n= 5

i= 4%

Fv= ?

Fv= P(1+i)^-n

Fv= 1320(1+0.04)^5

Fv= 1320(1.04)^5

Fv= 1320(1.216652)

Fv= $1605.98

Therefore, the total amount earned when earning on interest compounded annually is $1,605.98

Calculation of how much more earned

Amount earned = Amount earned as per compounded interest - Amount earned as per simple interest

Amount earned = $1,605.98 - $1,584

Amount earned = $21.98

Therefore, how much more earned is $21.98

A. Why may a hotel charge such very high prices for wine, soft drinks or even bottled water and yet quite reasonable prices for food and still get away with such high prices?

Answers

Answer:

The justification given is indeed the performance, product as well as the location which makes up for the exorbitant cost charged.

Explanation:

It's indeed primarily although together with the goods, they have their service. The hotels wouldn't go out of operation even though they demand these high costs since perfect pairing some other considerations included within the amount, including the environment, infrastructure, facilities, services, etc.The income elasticity becomes extremely relatively elastic, which means the demand doesn't really exist based on the paid costs.

The five generic types of competitive strategy are not characterized by a ________ provider strategy. Multiple Choice best-cost broad low-cost focused differentiation focused low-cost focused high-cost

Answers

Answer:

focused high-cost.

Explanation:

The five generic types of competitive strategy developed by Porter are:

low-cost provider strategiesbroad differentiation strategiesbest-cost provider strategies,focused low-cost strategiesfocused differentiation strategies

Porter's five generic types of competitive strategy were developed to assist an organization to develop a strategy that makes the company in a competitive position in the market, these strategies are based on three fundamental principles: cost leadership, differentiation and the focus.

According to the author, these bases would lead companies to implement offensive or defensive strategic actions that would lead to gaining advantages in relation to their competitors.

Therefore, The five generic types of competitive strategy are not characterized by a  focused high-cost provider strategy

Linda and Richard are married and file a joint return for 2019. During the year, Linda, who works as an accountant for a national airline, used $2,100 worth of free passes for travel on the airline; Richard used the same amount. Linda and Richard also used $850 worth of employee discount coupons for hotel rooms at the hotel chain that is also owned by the airline. Richard is employed at State University as an accounting clerk. Under a tuition reduction plan, Richard saved $4,000 in tuition fees during 2019. He is studying for a master's degree in business at night while still working full-time. Richard also had $30 worth of personal typing done by his administrative assistant at the University.

Required:
What is the amount of fringe benefits that should be included in Linda and Richard's gross income on their 2018 tax return?

Answers

Answer:

$4,850

Explanation:

The free passes are customer discounts and does not qualifies for taxable in kind benefits. The $850 is an in-kind benefits and thus must be included in the gross income. Furthermore, the $4,000 fee reduction is all because of the university employment and thus must be included in the gross income.

The $30 worth of personal typing done by Richard's administrative assistant is a third party favor and this favor was not from the employer so it has nothing to do with tax.

The increase in taxable gross income will be as under:

Increase in Taxable Gross Income = $850 + $4,000 = $4,850

Q 7.34: At the end of a shift, the sales clerk turned over $21,476.38 in cash, checks, and credit card receipts to the cashier. When the supervisor looked at the cash register tape for that shift, the tape stated that the sales clerk had sold $21,478.23 in merchandise. What should the company do as a result of this difference

Answers

Answer:

A cash shortage of $1.85 has occurred.  The sales clerk must have taken away more in tips than she should.

The company can ask the sales clerk to refund the sum of $1.85 shortage provided it allows the sales clerk also to take away overages.  If not, the shortage can be taken from the overtages, if any.

Explanation:

In handling cash, shortages and overages occur.  The best policy is to prevent such shortfall and excess in cash handling as they can lead to other problems.  But, where the shortages and overages are tolerable, the company should accommodate them by creating clear company policies about the issues.  Policies provide guides to employees so that they know what they are ordinarily expected to do.

"The net present value of the investment, excluding the annual cash inflow, is −$403,414. To the nearest whole dollar how large would the annual cash inflow have to be to make the investment in the equipment financially attractive? (Ignore income taxes.)"

Answers

Answer: c. $81,202

Explanation:

The inflow will be annual and constant which makes it an annuity. Given the discount rate of 12% and a useful life of 8 years, the present value interest discount factor based on the table is = 4.968.

Option 1 present value

= 48,410 * 4.968

= $240,500.88‬

Option 2 present value

= 50,427 * 4.968

= $250,521.34

Option 3 present value

= 81,202 * 4.968

= $403,412

Option 3 is the closest option with the difference being down to rounding errors. The annual inflow would have to be $81,202 to make the investment in the equipment financially attractive.

A foreign subsidiary of the Bart Corporation has certain balance sheet accounts on December 31, 20X2. Information relating to these accounts in U.S. dollars is as follows:_________.
Restated at Current Rates Historical Rates
-Marketable (AFS and Trading) securities $ 75,000 $ 85,000
-Inventories, carried at average cost 600,000 700,000
-Refundable deposits 25,000 30,000
-Goodwill 55,000 70,000
Total: $755,000 $885,000
What total should be included in Bart's balance sheet on December 31, 20X2, as a result of the preceding information?

Answers

Answer:

$885,000

Explanation:

How you are going to report the assets depends on whether you want to use the current rate method or the temporal (historic) method. Under the temporal method, you should use the historical rates, therefore, the total amount reported on the balance sheet is $885,000. if you want to use the current rate method, you should report the assets at $755,000, but you must also report an unrealized loss = $885,000 - $755,000 = $130,000 in the cumulative translation adjustment account. The total amount reported will not change, only the way you report it will change.

All of the following items should be considered when setting an export price
except
A. The tariff rate and value-added tax.
B. Transportation costs.
C. Prices of substitutes in foreign markets.
D. Repatriation restrictions

Answers

Answer:

D. Repatriation restrictions should not affect the prices of commodities

Explanation:

Repatriation  has to do with the conversion of foreign currency to home based currency. this is done in a bid to carry out international transaction effectively

while these items affects the prices of export

A. The tariff rate and value-added tax.

B. Transportation costs.

C. Prices of substitutes in foreign markets.

Trade-offs must be made among space, labor, and ____ with respect to warehousing design. Group of answer choices Construction materials Speed Mechanization Cost

Answers

Answer:

Mechanization

Explanation:

When a ware house is being setup, the aim is to get an efficient one that can service demand in a timely manner.

In order to minimise cost and maximise efficiency there is need to space, labour, and mechanisation that will be used on the production process.

Various analysis like capacity analysis and equipment analysis are carried out to ensure fast and cheap operation of the warehouse.

Inefficient warehouse designs leads to delay in service delivery and extra cost to the business.

you want to borrow $89000 from your local bank to buy a new sailboat. You can afford to make monthly payments of $1850, but no more. Assuming monthly compounding, what is the highest rate you can afford on a 60 month APR loan?

Answers

Answer:

9.06%

Explanation:

Given that :

The amount to be borrowed = $89000

Monthly payment PMT = $1850

Period = 60 month

The highest rate that can be afforded on the 60 month APR loan is determined by using the EXCEL Spreadsheet to compute the solution to this question. The spreadsheet screenshot can be seen below for better understanding.

Builtrite has two bond issues outstanding(sold two separate groups of bonds over the years). One issue has a 7 year maturity and the other issue had a 12 year maturity.Both bonds are paying 4.25% annual interest. Investors only require a 3.75% return, which of the following statements is true?
a) The 7 year bond issue is riskier than the 12 year bond issue
b) Both bond issues have the same amount of risk
c) The 7 year bond price will be selling closer to par value
d) The 12 year bond price will be selling closer to par value

Answers

Answer:

C

Explanation:

Here, we want to select which of the given options in the question is true/correct.

From the question we can observe that the two bonds have required return less than coupon rate. Hence we can conclude that, both are premium bonds. The 7-years bond however. will have closer price to par value.

Bond prices will gradually decrease as we have a decrease in years to maturity. This means that the closer the year to maturity, the lesser the value of the bond price

Ansara Company had the following abbreviated income statement for the year ended December 31, 20Y2:_________.
(in millions)
Sales $21,920
Cost of goods sold $18,630
Selling, administrative, and other expenses 1,970
Total expenses $20,600
Income from operations $1,320
Assume that there were $4,820 million fixed manufacturing costs and $1,100 million fixed selling, administrative, and other costs for the year. The finished goods inventories at the beginning and end of the year from the balance sheet were as follows:________.
January 1 $2,630 million
December 31 $3,070 million
Assume that 30% of the beginning and ending inventory consists of fixed costs. Assume work in process and materials inventory were unchanged during the period.
a. Prepare an income statement according to the variable costing concept for Ansara Company for 20Y2.
Ansara Company
Variable Costing Income Statement
For the Year Ended December 31, 20Y2 (in millions)
Sales $ 21,920
Variable cost of goods sold:
Beginning inventory $ 1,841
Variable cost of goods manufactured 13,810
Ending inventory 2,149
Total variable cost of goods sold
Manufacturing margin $
Variable selling and administrative expenses 870
Contribution margin $
Fixed costs:
Fixed manufacturing costs $ 4,820
Fixed selling and administrative expenses 1,100
Total fixed costs 5,920
Income from operations $
b. Explain the difference between the amount of income from operations reported under the absorption costing and variable costing concepts.
The income from operations under the variable costing concept be the same as the income from operations under the absorption costing concept when the inventories either increase or decrease during the year. In this case, Ansara’s inventory , meaning it sold than it produced. As a result, the income from operations under the variable costing concept will be more than the income from operations under the absorption costing concept. The reason is because the variable costing concept deduct the fixed costs in the period that they are incurred, regardless of changes in inventory balances.

Answers

Answer:

Ansara Company

a. Ansara Company  Variable Costing Income Statement

For the Year Ended December 31, 20Y2 (in millions)

Sales                                                                         $ 21,920

Variable cost of goods sold:

Beginning inventory                             $ 1,841

Variable cost of goods manufactured 13,810

Ending inventory                                    2,149

Total variable cost of goods sold                               17,800

Manufacturing margin                                               $4,120

Variable selling and administrative expenses              870

Contribution margin                                                 $3,250

Fixed costs:

Fixed manufacturing costs                      $ 4,820

Fixed selling and administrative expenses 1,100

Total fixed costs                                                        5,920

Income from operations                                         $2,670

b. Explanation of the difference between the amount of income from operations reported under absorption costing and variable costing concepts:

The difference occurs as a result of cost of inventory at the beginning and at the end.  Under variable costing concept, the fixed manufacturing costs does not form part of the product costs.  They are treated as period costs.  But under absorption costing, fixed manufacturing costs form part of the product costs.

Explanation:

a) Data:

Ansara Company Abbreviated Income Statement for the year ended December 31, 20Y2: (in millions):

Sales                                       $21,920

Cost of goods sold                $18,630

Gross profit                             $3,290

Selling, administrative, and

other expenses                        1,970

Income from operations        $1,320

b) Absorption costing concept is a costing technique that includes the full cost of manufacturing (i.e. cost of direct materials, direct labor, and all fixed production costs or overheads) in the product costs.  Under variable costing concept, the full cost of manufacturing is not included in the product costs.  Instead, all the variable costs (direct materials, direct labor, and variable overhead, whether factory or not)  are included, while fixed manufacturing overheads are treated as period costs and expensed.

Net sales $296,000 Cost of goods sold 138,000 Average inventory 50,000 What is the average days in inventory (round to the nearest whole day)?

Answers

Answer:

132 days

Explanation:

average days in inventory = number of days in a period / inventory turnover

Inventory turnover = costs of good sold / average inventory

Inventory turnover = 138,000 / 50,000 = 2.76

assuming a 365 day period, average days in inventory = 132.25 days = 132 days

In​ 2012, the nominal wage rate for unionized carpenters was​ $37.50 and the CPI was 204. Calculate the real wage rate for this group of workers.

Answers

Answer:

$18.38

Explanation:

The nominal wage rate for unionized carpenters in 2012 was $37.50

The CPI was 204

Therefore, the real wage rate can be calculated as follows

Real wage rate= Nominal wage rate/CPI × 100

= $37.50/204 × 100

= 0.1838 × 100

= $18.38

Hence the real wage rate for unionized carpenters is $18.38

Paul Hyatt owns and operates DeepClean, a Florida-based company that cleans up mold and mildew in homes and businesses. As the sole proprietor of the business, he has unlimited liability, which means:

Answers

Answer:

Paul Hyatt is fully liable for all business debts

Explanation:

Unlimited liability in this scenario, means that Paul Hyatt is fully liable for all business debts. That is because unlimited liability is defined as the full legal responsibility that business owners and partners assume for all business debts, and since Paul Hyatt is a sole proprietor which means that he both owns and runs DeepCleans and there is no legal distinction between him and the business entity, then he is fully liable for debts and profits of DeepClean.

Hillside issues $2,000,000 of 6%, 15-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $2,447,990.Required:a. Prepare the January 1, 2013, journal entry to record the bonds issuance.b. Prepare the first two years of an amortization table using the straight-line method.c. Prepare the journal entries to record the first two interest payments.

Answers

Answer:

a.

Cash $2,447,990 (debit)

Investment in Bonds $2,447,990 (credit)

b.

Amortization Table for the first two years will be :

2013

Capital $22.307

Interest $97.693

Balance $2,425,683

2014

Capital $34,472

Interest $145,528

Balance $2,402,475

c.

First Payment : June 30, 2013

Interest Expense $48,957 (debit)

Investment in Bonds $11,043 (debit)

Cash $60,000 (credit)

Second Payment : December 31, 2013

Interest Expense $48,736 (debit)

Investment in Bonds $11,264 (debit)

Cash $60,000 (credit)

Explanation:

On the day of issuance of the Bonds, the entries will be :

Cash $2,447,990 (debit)

Investment in Bonds $2,447,990 (credit)

Use the data given to prepare an amortization schedule

Hint : First find the YTM as follows :

n = 15 × 2 = 30

FV = - $2,000,000

PV = $2,447,990

PMT = ($2,000,000 × 6%)/2 = $60,000

P/ yr = 2

YTM = ? 3.998

Using a financial calculator, the YTM is 3.998 or 4 %

Amortization Table for the first two years will be :

2013

Capital $22.307

Interest $97.693

Balance $2,425,683

2014

Capital $34,472

Interest $145,528

Balance $2,402,475

Journal Entries for the Payment of Interest :

First Payment : June 30, 2013

Interest Expense $48,957 (debit)

Investment in Bonds $11,043 (debit)

Cash $60,000 (credit)

Second Payment : December 31, 2013

Interest Expense $48,736 (debit)

Investment in Bonds $11,264 (debit)

Cash $60,000 (credit)

Happy Frog Inc. is analyzing a project with the following cash flows: Year Cash Flow 0 -$762,000 1 $300,000 2 $-550,000 3 $660,000 4 $440,000 This project has cash flows. Happy Frog Inc.’s WACC is 8.00%. Calculate this project’s modified internal rate of return (MIRR).

Answers

Answer:

Happy Frog Inc.

Modified Internal Rate of Return (MIRR) = (Future value of positive cash flows / present value of negative cash flows) (1/n) – 1

= ($1,400,000 /-$1,198,700) (1/5) - 1

= -1.167932 x -0.8

= 0.934

MIRR = 9.34%

Explanation:

a) Future Value of positive cash flows:

1           $300,000

3          $660,000

4          $440,000

Total $1,400,000

b) Present value of negative cash flows:

0         -$762,000

2         -$436,700    ($550,000 x 0.794)

Total -$1,198,700

c) The Modified Internal Rate of Return for Happy Frog Inc. is greater than its Weighted Average Cost of Capital.  Therefore, the project looks very promising and should be accepted.

Excey Corp. has 8 percent coupon bonds making annual payments with a YTM of 7.2 percent. The current yield on these bonds is 7.55 percent. How many years do these bonds have left until they mature?

Answers

Answer:

11.057 years

Explanation:

For computing the number of years we need to apply the NPER formula i.e to be represented in the attachment below:

Given that,  

Present value = $1,000 × 8% ÷ 7.55% = $1,059.60

Assuming Future value = $1,000

Rate of interest = 7.2%

PMT = $1,000 × 8% = $80

The formula is shown below:

= NPER(Rate;PMT;-PV;FV;type)

The present value come in negative

So, after applying the above formula, the number of years is 11.057 years

According to the international fisher effect (IFE), the exchange rate percentage change should be approximately equal to the differential in income levels between two countries.

a. True
b. False

Answers

I think it’s a. True

During August, Boxer Company sells $359,000 in merchandise that has a one year warranty. Experience shows that warranty expenses average about 5% of the selling price. The warranty liability account has a credit balance of $13,100 before adjustment. Customers returned merchandise for warranty repairs during the month that used $9,700 in parts for repairs. The entry to record the customer warranty repairs is:

Answers

Answer:

Dr Estimated Warranty Liability $9,700

Cr Parts Inventory $9,700.

Explanation:

Preparation of the entry to record the customer warranty repairs

Based on the information given we were told that Customers had to returned the merchandise for warranty repairs in which the amount of $9,700 was used in parts for repairs this means the journal entry to record the customer warranty repairs will be:

Dr Estimated Warranty Liability $9,700

Cr Parts Inventory $9,700.

In your opinion, does having two different existing labor federations (AFL-CIO and Change to Win) strengthen or weaken the ability of organized labor to represent the interests of employees today? Support your position.

Answers

Answer:

They weaken their ability to represent the interests of employees

Explanation:

The two organizations American Federation of Labor(AFL) and Congress of Industrial organizations(CIO) work differently regarding their approach to representing labor or employees. They have had disagreements in the past, from CIO breaking out of AFL to some violent exchanges and differing policies to representing labour. These differences make it less effective to represent employees as these unions are not entirely unified.

Sibling Furniture Company manufactures and sells oak tables and chairs. Price and cost data for the furniture follow:
Furniture has three sales​ representatives: Archie​, Bryce​, and Crissy. Archie sold 70 tables with 8 chairs each. Bryce sold 50 tables with 4 chairs each. Crissy sold 80 tables with 6 chairs each.
Requirement
Calculate the total contribution margin and the contribution margin ratio for each sales representative (round to two decimal places) Before calculating the total contribution margin, begin by identifying and calculating the total number of tables and chairs sold by each sales representative for the period.
Sales representative Tables sold Chairs per table Total chairs sold
Archie
Bryce
Cory

Answers

Answer:

                            contribution margin        CMR (%)

Archie                      $51,100                         39.9%

Bryce                       $26,500                       20.7%

Cory                        $50,400                       39.4%

Total                      $128,000                        100%

Explanation:

sales price per table $1,100

variable production costs $715

sales commissions $55

contribution margin per table $330

sales price per chair $100

variable production costs $45

sales commissions $5

contribution margin per chair $50

Archie sold 70 tables and 560 chairs, total contribution margin:

tables ⇒ 70 x $330 = $23,100

chairs ⇒ 560 x $50 = $28,000

total = $51,100

Bryce  sold 50 tables and 200 chairs, total contribution margin:

tables ⇒ 50 x $330 = $16,500

chairs ⇒ 200 x $50 = $10,000

total = $26,500

Cory sold 80 tables and 480 chairs, total contribution margin:

tables ⇒ 80 x $330 = $26,400

chairs ⇒ 480 x $50 = $24,000

total = $50,400

                            contribution margin        %

Archie                      $51,100                       39.9%

Bryce                       $26,500                     20.7%

Cory                        $50,400                     39.4%

Total                      $128,000                      100%

The following costs result from the production and sale of 4,500 drum sets manufactured by Tight Drums Company for the year ended December 31, 2019. The drum sets sell for $300 each. The company has a 35% income tax rate.
Variable production costs
Plastic for casing $121,500
Wages of assembly workers 414,000
Drum stands 162,000
Variable selling costs
Sales commissions 112,500
Fixed manufacturing costs
Taxes on factory 15,000
Factory maintenance 30,000
Factory machinery depreciation 90,000
Fixed selling and administrative costs
Lease of equipment for sales staff 30,000
Accounting staff salaries 80,000
Administrative management salaries 160,000
Required:
1. Prepare a contribution margin income statement for the year.
2. Compute its contribution margin per unit and its contribution margin ratio.
3. For each dollar of sales, how much is left to cover fixed costs and contribute to operating income?

Answers

Answer:

Tight Drums Company

1. Contribution Margin Income Statement for the year ended December 31, 2019:

Sales Revenue                                                     $1,350,000

Variable production costs:

 Plastic for casing                  $121,500  

 Drum stands                          162,000

Wages of assembly workers  414,000

Total variable prodn. costs           $697,500

Variable selling costs :

Sales commissions                          112,500

Total variable costs                     $810,000             810,000

Contribution                                                          $540,000

Fixed manufacturing costs:

Taxes on factory                              15,000

Factory maintenance                      30,000

Factory machinery depreciation    90,000

Total Manufacturing overhead $135,000              135,000

Fixed selling and administrative costs :

Lease of equipment for sales staff         30,000

Accounting staff salaries                         80,000

Administrative management salaries   160,000

Total fixed selling and admin. costs $270,000    270,000

Operating Profit (Pre-Tax)  Income                       $135,000

Income Tax Expense (Rate = 35%)                           47,250

Net Income                                                             $87,750

2.Computation of Contribution Margin per unit and Contribution Margin Ratio:

a) Contribution Margin per unit

= Contribution Margin divided by Units sold

= $540,000/4,500

= $120 per unit

b) Contribution Margin Ratio

= Contribution per unit/Selling price * 100

= $120/$300 * 100

= 40%

3. For each dollar of sales, contribution per dollar

= 40% of $1

= $0.40

Explanation:

a) Data:

Sales = 4,500 drums

Selling price = $300 each

Sales Revenue = 4,500 x $300 = $1,350,000

Variable production costs:

 Plastic for casing                  $121,500  

 Drum stands                          162,000

Wages of assembly workers  414,000

Total variable prodn. costs $697,500

Variable selling costs :

Sales commissions                 112,500

Total variable costs            $810,000

Fixed manufacturing costs:

Taxes on factory                              15,000

Factory maintenance                      30,000

Factory machinery depreciation    90,000

Total Manufacturing overhead $135,000

Fixed selling and administrative costs :

Lease of equipment for sales staff         30,000

Accounting staff salaries                         80,000

Administrative management salaries   160,000

Total fixed selling and admin. costs $270,000

Income Tax Rate = 35%

b) Tight Drums Company's contribution margin income statement is a financial statement that separates all the variable costs from the fixed costs.  The difference between Tight Drums' Sales Revenue of $1,350,00 and the Total Variable Costs of $810,000 is called the Contribution Margin.

The Contribution margin of $540,000 shows how much of the sales revenue is left to cover the fixed costs totalling $405,000 and generate operating income, after deducting all the variable costs.

This contribution margin can be expressed per unit by dividing the contribution margin of $540,000 by the 4,500 units sold.  The per unit value can then be expressed as a ratio of the selling price.  From the contribution margin ratio, we can estimate how much is left per dollar of sales for Tight Drums Company to cover its fixed costs and generate operating income.

Reporting the details of notes is consistent with which accounting principle that requires financial statements (including footnotes) to report all relevant information?

a. Relevance
b. Full disclosure
c. Evaluation
d. Materiality
e. Matching

Answers

Answer:

The correct answer is Option B.

Explanation:

The full disclosure principle is a concept that requires all necessary details relating to the notes to the financial statements are provided and explained in such a way that would be understandable to the users of the financial statements.

The disclosures are expected to be in compliance with the accounting standards, regulatory pronouncements, among others.

Fenwick operates a grocery store and his retail building was completely destroyed by a hurricane on August 22, Year 10. The fair market value of the building before the hurricane was $1,200,000 with an adjusted basis of $800,000. His insurance company reimbursed him $1,200,000 of December 2, Year 10. When is the last date that Fenwick can replace this building with qualifying property and avoid recognizing gain from this transaction.A. December 31, 2013.B. August 22, 2015.C. December 31, 2015.D. December 31, 2016.

Answers

Answer:

D. December 31, 2016.

Explanation:

Fenwick company had retail building which was destroyed on August 22, hurricane. The hurricane was so intense that complete building was damaged. The building already had an insurance policy due to which the fair value of the building is reimbursed. Fenwick can claim the fair value of the building from an insurance company. If he replaces the building with qualifying building on the date he gets the insurance claim he will not be required to record gain of the transaction.

MacKenzie Company sold $620 of merchandise to a customer who used a Regional Bank credit card. Regional Bank deducts a 5.0% service charge for sales on its credit cards. MacKenzie electronically remits the credit card sales receipts to the credit card company and receives payment immediately. The journal entry to record this sale transaction would be:

Answers

Answer:

DR Cash $589  

DR Credit Card expense $31

CR Sales  $620

(To record sales via credit card)

Working

Cash

= 620 * ( 1 - 5%)

= $589

Credit Card Expense

= 620 * 5%

= $31

4. Sales tax is taken on
O A. selling price minus trade discount.
B. shipping charges.
O c. trade discounts.
0 D. cash discounts.

Answers

Answer:

A. selling price minus trade discount.

Explanation:

Suppose today is May 1, 2014, and your firm produces breakfast cereal and needs 90,000 bushels of corn in July 2014 for an upcoming promotion. You would like to lock in your costs today because you are concerned that corn prices might rise between now and July. Each contract is for 5,000 bushels; the settle price for July 2014 is $5.19 per bushel. Suppose corn prices are $5.09 per bushel in July. What will your cumulative mark to market be

Answers

Answer:

$467,100

Explanation:

The solution of cumulative mark to market is shown below:-

Total cost for 90,000 bushels = Per bushel × Needed bushels

= $5.19 × 90,000

= $467,100

Therefore for calculating the total cost we simply applied the above formula i.e by multiplying the per bushel with the needed bushels so that the total cost for 90,000 bushels could arrive

Assume that over the past 85 years, the total annual returns on large-company common stocks averaged 12.3 percent, small-company stocks averaged 17.4 percent, long-term government bonds averaged 5.7 percent, and U.S. T-bills averaged 3.8 percent. What was the average risk premium earned by long-term government bonds, and small-company stocks respectively?

Answers

Answer:

1.9%

13.6%

Explanation:

Average risk premium earned by long-term government bonds =

long term average returns on Government bonds - average returns on US T-bills = 5.7% - 3.8% = 1.9%

Average risk premium earned by small-company stocks =

average returns on Company  stock - average returns on US T-bills = 17.4% - 3.8% = 13.6%

Wolfpack Construction has the following account balances at the end of the year. Accounts Balances Equipment $ 19,000 Accounts payable 1,600 Salaries expense 26,000 Common stock 12,000 Land 11,000 Notes payable 13,000 Service revenue 32,000 Cash 4,600 Retained earnings ?

Answers

Answer:

$6,000

Explanation:

Net income for the year = Service revenue - Salaries

= $32,000 - $26,000

= $6,000

Since Net income = retained earnings,

Therefore, retained earnings = $6,000

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