Answer and Explanation:
The indication of the amount in the following cases are shown below
Particulars Scenario a Scenario b Scenario c
Assets A 253,800 325,100 325,000
Less:
Liability to
be settle B 316,000 316,000 316,000
Income to be
recognised (A - B) 0 9,100 9,000
Answer:
<u>No</u>
Explanation:
<em>Remember, </em>in business law, as long as both parties did not sign a contractual document, the purchase is not legal.
In this case, it could be observed that Ganze only "mailed an acceptance" not a signed document between both parties agreeing on the purchase of her antique car.
Also, the fact that she quickly sent a telegram letting Archer know that she is rejecting the offer, shows that she acted in good fate to withdraw her acceptance on time.
Answer:
$ 925
Explanation:
Data provided:
Credit sales = $ 43,000
Collection of credits = $ 34,000
Amount written off = $ 675
Estimated uncollectible amount at the year end = $ 250
Now,
the bad debt expenses will be the total amount that has not be recovered back
i.e the amount written off + uncollectible amount
or
bad debt expenses = $ 675 + $ 250 = $ 925
Answer:
EU materials: 434.040
EU conversion: 412,632
Explanation:
W/a method count the complete units plus the percnetage of completion in the ending work in process intventory.
Materials:
transferred-out (completed) 411,000
ending WIP inventory
32,000 x 72% = 23,040
Equivalent untis materials: 434.040
Conversion:
transferred-out (completed) 411,000
ending WIP inventory
32,000 x 51% = 1,632
Equivalent untis conversion: 412,632
<h3>
Option 2 is correct - There is a higher probability of experiencing Financial distress.</h3>
Firms with volatile operating income tend to have lower debt ratios because there is a higher probability of experiencing financial distress.
Financial distress is a condition in which a company or individual cannot generate sufficient revenues or income, making it unable to meet or pay its financial obligations. This is generally due to high fixed costs, a large degree of illiquid assets, or revenues sensitive to economic downturns.
Following reasons can lead to financial distress in a firm.
- Cash flows - The first sign that things are going wrong is a constant shortage of cash. The old adage that cash is king exists for a reason
- Falling margins and poor profits - Experienced entrepreneurs have learnt that for long-term survival what matters are profits, not only sales. Poor profits are usually the first indicators that a business is not doing well.
- Poor sales growth or decline in revenues - When there is no sales growth despite extreme marketing activities, this could indicate a lack of customer acceptance, which is key to any business success.
- Extended payment days - Another sign of possible trouble is a rise in either creditor or debtor payment days. If business has to delay payments to its creditors, this can force some suppliers to stop supplying
- Difficulty in raising capital - If a company is constantly borrowing and asking its investors to inject more capital, this is an underlying sign that it is increasingly finding it difficult to self-sustain.
Hence, Firms with volatile operating income tend to have lower debt ratios because there is a higher probability of experiencing financial distress.
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