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Vlada [557]
2 years ago
5

Sheffield Company signed a long-term noncancelable purchase commitment with a major supplier to purchase raw materials in 2021 a

t a cost of $1,031,600. At December 31, 2020, the raw materials to be purchased have a market value of $978,300. In 2021, Sheffield paid $1,031,600 to obtain the raw materials which were worth $978,300. Sheffield uses a periodic inventory system. Prepare the entry to record the purchase.
Business
1 answer:
Sphinxa [80]2 years ago
3 0

The journal entry to record the purchase of the raw materials by Sheffield Company is as follows:

Debit Purchases $1,031,600

Credit Accounts Payable $1,031,600

  • To record the purchase of the raw materials in 2021.

The December adjusting entry can be revised with:

Debit Estimated Liability $53,300

Credit Unrealized holding Loss $53,300

  • To reverse the December 31 adjusting entry.

<h3>What is an unrealized holding loss?</h3>

In this instance, the unrealized holding loss arose from the fact that the market value of the raw materials is less than the purchase amount because of the noncancelable commitment.

Thus, the unrealized holding loss arose as the difference between the market value and the purchase amount.

<h3>Data Analysis:</h3>

Purchases $1,031,600 Accounts Payable $1,031,600

Estimated Liability $53,300 Unrealized holding Loss $53,300

Thus, the entry to record the purchase is a debit to the purchases account and a credit to accounts payable.

Learn more about recording purchases at brainly.com/question/24179237

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Answer:

The answer is $169,400

Explanation:

Gross profit is a line item under income statement and it is the difference between net sales(revenue) and cost of sales. It is a measure of profitability ( net sales - cost of sales?

Cost of sales = beginning Inventory + purchases - ending Inventory

$27,600 + $174,800 - $37,800

$164,600.

Now, cost of sales is: ( net sales - cost of sales)

$334,000 - $163,800

=$169,400

6 0
3 years ago
To estimate the value of a nonconstant growth stock, we can estimate the value of each dividend during the period of nonconstant
garri49 [273]

Answer:

The correct answer is True.

Explanation:

The Gordon growth model is a method of valuing a company's share price, using constant growth and discounting the value of future dividends today. Gordon Growth is often known by its English name.

It is a dividend discount model that assumes that the growths that the company will experience are constant. It is based on the theory that the price of a share should be equal to the price of the dividends that the company is going to pay, discounted to its net present value.

If the share price in the market is less than the result obtained by the discounted dividend model, the share is undervalued and therefore, it is recommended to buy. If, on the other hand, the market price is higher than that of the model, it is understood that the share price is too high.

3 0
3 years ago
The Conways received close to $40 million from the sale. However, shortly after the sale, the Conways regretted signing the non-
Lyrx [107]

Answer:

Incorrect

Explanation:

The Bard company has paid millions of dollar of consideration and requires that the Philip Conway Inc. would transfer the ownership of the RM Corporation to Bard. The court dismissed the case and said that the subsidiary is the property of Bard now because their was a flow of consideration from the part of Bard.

6 0
3 years ago
Zappos segments its B2B customers by sifting through the data it has collected on companies that request the free portion of its
AlladinOne [14]

Answer:

Customer Type Segmentation

Explanation:

Customer Type Segmentation is a process where a company analyzes and divides its customer base into groups following a common factor between then. For example, it could be age, residence place, monthly income, etc. In this case, Zappos is dividing its customer base into groups based on what kind of business they are in. That offers a variety of benefits, such as targeted ads, better retention strategies or a superior and personalized customer experience.

8 0
3 years ago
Suppose that the U.S. government decides to charge cola producers a tax. Before the tax, 50 billion cases of cola were sold ever
Georgia [21]

Answer:

U.S. Tax Burden on Cola:

The amount of the tax on a case of cola is $4 per case. Of this amount, the burden that falls on consumers is $1 per case, and the burden that falls on producers is ___$3______ per case.

The effect of the tax on the quantity sold would have been larger if the tax had been levied on consumers.

a. True

b. False

Explanation:

The tax burden on consumers, which is represented by the difference in the price of cola from $5 to $6 per unit is $1 ($6 - $5).  However, the cash received by producers reduced by $3 from $5  to $2.  This shows that the total tax burden on both consumers and producers is $4 ($1 + $3).

This represents a total tax burden of $4 or about 67% based on the new selling price of cola or 80% based on the old selling price of cola.

"The effect of the tax on the quantity sold would have been larger if the tax had been levied on consumers alone.   This because the price of cola would have increased to $9 per unit.  Since the demand for cola in this instance is elastic, this change in price would have caused a more than 80% change in the quantity demanded.

4 0
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