Answer:
Assets are greater than liabilities when there are positive capital requirements.
Explanation:
- Morrie's student loan is an asset from Morrie's perspective. {false}
Morrie's student loan is a <em>liability</em> form his/her perspective. It is an asset for the borrower of the loan, usually a bank.
- Jane's car loan is a liability from Jane's perspective; this same loan is also viewed as a liability from the bank's perspective. {false}
This is one is half true, half false because Jane's loan is a liability from her perspective, but for the borrower, the bank, it is an asset.
- Assets are greater than liabilities when there are positive capital requirements.{true}
Because Working Capital = Current Assets minus (-) Current Liabilities. Usually Assets need to be grater than liabilities to have positive capital or Working Capital.
- Bank deposits at the Federal Reserve are a liability for the bank. {false}
Bank deposits at the Federal Reserve are a "special kind" of asset. What I mean by that is a requirement by the Federal Reserve to have a deposit in there as a security or collateral but since that deposit is just there. The bank actually can work or make profit out of it.
Answer and Explanation:
The computation is shown below:
Predetermined overhead rate is
= Variable overhead cost per direct labor hours + Fixed overhead cost ÷ Direct labor-dollars
= $0.17 + $4,956,000 ÷ 8,260,000
= $0.17 + $0.6
= $0.77
Now the total cost is
= Direct material cost + direct labor cost + manufacturing cost
= $1,386,000 + $2,478,000 + ($2,478,000 × $0.77)
= $5,772,060
Answer
Retained earnings will be overstated by $38.40 million
Explanation:
The overstatement of retained earnings by this amount arises from the fact that if the depreciation of $64 million had been charged, the charge will have been tax deductible at 40% thus the amount overstated if (1-40%) x $64m =$38.4m.
In the given case, bank is not consider as holder in due course because here it will act as intermediary who collected amount from company's account.
<h3>What is holder in due course?</h3>
A holder in due course refers to an individual who have the authority to hold the negotiable instrument in good faith.
This holder in due course will be referred to as the person who have received or given something in exchange for the instrument.
When any individual receives a gift from someone, then it will not be considered as holder in due course because he had not given any value in exchange.
So yes, in this situation when the CEO stole money from the company by writing a series of checks and withdrawing it in a personal account at the bank. Bank will be not be considered as holder in due course due to intermediary role.
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Answer:
Dr Supplies Expense $4050
Cr Supplies $4050
Explanation:
Preparation for the appropriate adjusting journal entry to be made at the end of the period
Based on the information given we were told that the company made purchased of office supplies of the amount of $6300 in which the full supplies amount was debited which means that if at the end of the accounting period the physical count of office supplies shows the amount of $2250 The appropriate adjusting journal entry to be made at the end of the period would be:
Dr Supplies Expense $4,050
Cr Supplies $4,050
($6300-$2250)