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const2013 [10]
1 year ago
9

Company A uses the FIFO method to account for inventory and Company B uses the LIFO method. The two companies are exactly alike

except for the difference in inventory cost flow assumptions. Costs of inventory items for both companies have been rising steadily in recent years, and the following company has increased its inventory the following year. Ignore tax effects.
Required:
Identify which company will report the higher amount for the following ratios. If it is not possible to determine, explain why.
(f) Debt-to-equity ratio
Business
1 answer:
alexandr1967 [171]1 year ago
7 0

Company A uses the FIFO method to account for inventory and Company B uses the LIFO method. The two companies are exactly alike except for the difference in inventory cost flow assumptions.  The debt-to-equity ratio measures your company's total debt relative to the amount originally invested by the owners and the earnings that have been retained over time.

The debt to equity ratio using the book value of equity in 2019 would be 2.29.

Finding the debt-to-equity ratio.

This can be found by the formula:

= Interest bearing Debt / Book value of equity

= (Notes payable + Current maturities of long term debt + Long term debt) / Book value of equity

= (10.5 + 39.9 + 239.7) / 126.6

= 2.29

Learn more about debt-to-equity  here

brainly.com/question/21408403

#SPj4

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kozerog [31]

Answer:

Net income and the assets will be overstated by the amount of $40,000

Explanation:

On purchasing the insurance, the accounts which got affected are the Net income as as the net income will decrease because the cash is paid against the insurance. And the assets will be affected on buying the insurance.

If the company neglects to make proper adjustment for the insurance, it will lead to overstated balance of the assets account as well as the net income of the company with the balance of $40,000 because it came in effect on April 30.

Working:

Amount = $60,000 / 12

= $5,000

For 4 months,it will be:

= $5,000 × 4

= $20,000

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2 years ago
You would like to evlauate pursuing a new computing tool for your team. The new workstation would impact 10 of your campany staf
tino4ka555 [31]

Answer:

-7,759.29 dollar

Explanation:

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pw = -5500-1100(p/a,17%,3) +275(p/f,17%,3)

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7 0
3 years ago
Yosevin began his memo with background information and explanations before announcing a reduction in health insurance coverage.
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7 0
3 years ago
Below are several transactions for Scarlet Knight Corporation. A junior accountant, recently employed by the company, proposes t
azamat

Answer:

Scarlet Knight Corporation

Correct postings:

Accounts                 Debit    Credit

1. Cash                    12,500

  Common Stock                 12,500

2. Cash                     3,500

   Service Revenue               3,500

3. Supplies                 250

  Cash                                      250

4. Rent Expense       550

   Cash                                    550

5. Equipment         1,950

   Cash                                 1,950

Explanation:

a) Data and Calculations:

Accounts                 Debit    Credit

1. Common Stock    12,500

  Cash                                   12,500

2. Cash                     3,500

   Service Revenue               3,000

3. Supplies                 250

  Cash                                      250

4. Rent Expense       550

   Cash                                    550

5. Cash                   1,950

   Equipment                        1,950

b) The accounting rule is to debit the value receiver and to credit the value giver.  Generally, assets, expenses, and losses normally have debit balances while liabilities, equities, incomes, and gains have credit balances.

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