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2 years ago

The sales returns and sales allowances accounts are classified as

1 answer:

6 0

These two Sales Revenue accounts (the sales returns and sales allowances) are classified as Contra accounts. They have debit balances unlike the Sales Revenue account.

The purpose of their creation is to maintain the Sales Revenue account at its gross amount for measure purposes.

The Sales Returns account is the General Ledger account for recording goods returned by customers. It reduces the Accounts Receivable account, which is credited with Sales Returns.

The Sales Allowances account records allowances granted to customers for defective goods, which reduce their balances.

Thus, the two sales accounts are contra accounts and they have debit balances.

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Four companies computed their days' sales in inventory as follows: Company A: 47.2 Company B: 36.5 Company C: 45.1 Company D: 39

Leviafan [203]

The most efficient and effective in managing its inventory is Company B.

<h3>Who is the most efficient?</h3>

The days' sales in inventory is a financial ratio that measures the rate at which a firm is able to sell its inventory in a given year. The lower the ratio, the more efficient a firm is in selling its inventory.

Days' sales in inventory = number of days in a period / inventory turnover

Inventory turnover = cost of goods sold / average inventory

To learn more about financial ratios, please check: brainly.com/question/26092288

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7 0

2 years ago

Wilfred Nadeau owns 300 shares of Consolidated Glue. The company's board of directors recently declared a cash dividend of 45 c

dedylja [7]

Answer:

a. Zero dividend.

b. 3.5 new shares;

texes will be paid.

Explanation:

a. March 20 is a date earlier than when the dividends are too be paid on April 18, and as such Wilfred Nadeau will not receive any dividend if he sells his stocks since he no longer has ownership of them.

b. 45 cents dividends per 300 stocks of Wilfred is $135 (reinvestment dividend plan).

With a discount of 3.4% at $39.8 (3.4%*39.8) current price per stock makes the total cost per stock after discount= $38.4.

Dividing the reinvestment dividend plan over the discounted price (135/38.4) = 3.5 new shares, According to the requirements of law the investor must still pay tax annually on his or her dividend income, whether it is received as cash or reinvested.

8 0

3 years ago

Maggie's Muffins, Inc., generated $2,000,000 in sales during 2015, and its year-end total assets were $1,400,000. Also, at year-

Ksenya-84 [330]

Answer:

The Sales will increase by $350,000 (2000,000 * 17.5%)

Explanation:

As we know that,

Self Supporting Growth Rate = Return on Equity * (1 - Payout Ratio) ...Eq1

Here

Payout ratio given is 50%

and

Return on Equity = 35% (Step 1)

By putting values in Eq1, we have:

Self Supporting Growth Rate = 35% * (1 - 50%)

Self Supporting Growth Rate = 17.5%

Which means that Sales will increase by $350,000 (2000,000 * 17.5%) which is 17.5%.

Step 1: Find Return on Equity

We know that:

Return on Equity = Net Income / Equity ..............Eq2

As we are not given value of Net Income we can not calculate the value of return on equity. But there is another way that we can calculate by simply multiplying and dividing by sales on Left hand side of the Eq2 equation.

Return on Equity = Net Income / Equity * Sales / Sales

By rearranging, we have:

Return on Equity = Net Income / Sales * Sales / Equity

Now here,

Net Income / Sales = Profit Margin

By putting this in the above equation, we have:

Return on Equity = Profit Margin * Sales / Equity

Here

Profit Margin is 7% given in the question.

Sales were $2,000,000

And

Equity is $400,000 (Step 2)

By putting values, we have:

Return on Equity = 7% * $2,000,000 / $400,000

Return on Equity = 35%

Step 2. Find Equity

Equity = Assets - Liabilities

Here,

Assets are worth $1,400,000

Liabilities are standing at $1,000,000 which includes only current liabilities because company doesn't have any long term borrowings

By putting the values, we have:

Equity = $1,400,000 - $1,000,000 = $400,000

Brother, don't forget to rate the answer.

5 0

3 years ago

Elliott has the following capital gain and loss transactions for 2021. a. Short-term capital gain $1,500 b. Short-term capital l

vazorg [7]

The net short term capital loss for Elliott for 2021 will be $(2100); and the net long term capital gain will be $9,300.

<h3>What is capital gain?</h3>

The gain or positive returns made on the investment or engagement of money during a particular period is known as a capital gain. A short term capital gain is derived within 1 year; and long term is more than a year.

Hence, the capital gains and losses made by Elliott are aforementioned.

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4 0

2 years ago

The marginal product of labor eventually slopes downward due to diminishing marginal costs diminishing average returns diminishi

vampirchik [111]

The marginal product of labor eventually slopes downward due to the law of diminishing marginal productivity. The law of diminishing marginal productivity is a principle within economics. This principle states even if you increase input in one area and keep the others the same, output does increase, there will be limited effect and eventually balance back out resulting in no effect on the output.

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3 years ago