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1 year ago

indicators that the local currency is also the functional currency include all of the following except:

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6 0

Indicators that the local currency is also the functional currency include all of the following except the parent typically provides the financing or provides a guarantee.

A functional currency is one that is utilized in the main economic setting in which a company conducts business. This is the setting in which an entity generates and spends money most frequently. When defining the functional currency of an entity, the following key considerations should be taken into account:

The principal currency influencing retail prices (usually the currency in which prices are denominated and settled).

The money of the nation whose laws and competition have the biggest impact on retail pricing.

The principal currency affecting labor expenses and other costs of goods sold (usually the currency in which prices are denominated and settled).

The currency in which an entity keeps its operating receipts and the currency in which debt and equity instruments are issued are less important deciding factors.

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On January 1, 2021, Strato Corporation borrowed $2 million from a local bank to construct a new building over the next three yea

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Answer:

Period Installment Interest Paid Capital Paid Balance

January 1, 2021 $2,000,000

December 31, 2021 $776,067 $160,000 $616,067 $1,383,933

December 31, 2021 $776,067 $110,715 $665,352 $718,581

December 31, 2021 $776,067 $57,486 $718,581 0

Explanation:

Step 1

First clearly identify the parameters of the Loan

PV = $2,000,000

N = 3

PMT = - $776,067

P/YR = 1

i = 8%

FV = $0

Step 2

Since there is no missing parameter, we can then move on to construct our loan amortization schedule.

Period Installment Interest Paid Capital Paid Balance

January 1, 2021 $2,000,000

December 31, 2021 $776,067 $160,000 $616,067 $1,383,933

December 31, 2021 $776,067 $110,715 $665,352 $718,581

December 31, 2021 $776,067 $57,486 $718,581 0

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2 years ago

What are the main purposes of a budget?

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In the context of business management, the purpose of budgeting includes the following three aspects:

•A forecast of income and expenditure (and thereby profitability)

•A tool for decision making

•A means to monitor business performance

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2 years ago

Read 2 more answers

What will a contingency note contain?

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Answer:

Contingencies are potential liabilities that might result because of a past event

Explanation:

Reasonably possible losses are only described in the notes and remote contingencies can be omitted entirely from financial statements.

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2 years ago

Assume that Beaver uses the periodic system, and the end of period ending inventory for January is 110 units. a. Prepare all nec

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Answer:

Part 1 a

jan 4

Debit ; Accounts Receivable (80 x $8.00) $640

Credit : Revenue $640

jan 11

Debit ; Purchases (150 x $6) $900

Credit : Accounts Payable $900

jan 13

Debit ; Accounts Receivable (120 x $8.75) $1,050

Credit : Revenue $1,050

jan 20

Debit ; Purchases (160 x $7) $1,120

Credit : Accounts Payable $1,120

jan 27

Debit ; Accounts Receivable (100 x $9.00) $900

Credit : Revenue $900

jan 31

Debit ; Cost of Sales (100 x $5 + 150 x $6 + 160 x $7) $2,520

Credit : Inventory $2,520

Part 1 b

Gross Profit = Sales - Cost of Sales

Sales = ( 80 x $8.00 + 120 x $8.75 + 100 x $9.00) = $2,590

Cost of Sales = (100 x $5 + 150 x $6 + 160 x $7) = $2,520

Therefore,

Gross Profit = $2,590 - $2,520

= $70

Part 2 a

jan 4

Debit ; Accounts Receivable (80 x $8.00) $640

Debit : Cost of Sales (80 x $5.00) $400

Credit : Revenue (80 x $8.00) $640

Credit : Inventory (80 x $5.00) $400

jan 11

Debit ; Purchases (150 x $6) $900

Credit : Accounts Payable $900

jan 13

Debit ; Accounts Receivable (120 x $8.75) $1,050

Debit : Cost of Sales (20 x $5.00 + 100 x $6) $700

Credit : Revenue (120 x $8.75) $1,050

Credit : Inventory (20 x $5.00 + 100 x $6) $700

jan 20

Debit ; Purchases (160 x $7) $1,120

Credit : Accounts Payable $1,120

jan 27

Debit ; Accounts Receivable (100 x $9.00) $900

Debit : Cost of Sales (50 x $6.00 + 50 x $7) $650

Credit : Revenue (100 x $9.00) $900

Credit : Inventory (50 x $6.00 + 50 x $7) $650

Part 2 b

Gross Profit = Sales - Cost of Sales

Sales = ( 80 x $8.00 + 120 x $8.75 + 100 x $9.00) = $2,590

Cost of Sales = ($400 + $700 + $650) = $1,750

Therefore,

Gross Profit = $2,590 - $1,750

= $840

Explanation:

Hie, see the attached the full question as images below

Part 1

Note that the question in this part requires us to use the Periodic Inventory System. In Periodic Inventory system, Inventory Valuation and calculation of Cost of Goods Sold is done at the end of the Period, in this case at the end of the month of January.

Part 2

Again it is important to note that the question in this part requires us to use the Perpetual Inventory System. In Perpetual Inventory system, Inventory Valuation and calculation of Cost of Goods Sold is done at the after each and every transaction made.

Overall Comment

The Company use of FIFO should be considered in both the Periodic Inventory System in Part 1 and Perpetual Inventory System in Part 2. FIFO method assumes that the first goods received by the business will be the first ones to be delivered to the final customer.

That said, Cost of Sales for Part 1 are determined and recognized at the end of the period and Cost of Sales for Part 2 are determined and recognized after every sale transaction made

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