Answer:
Kevin has analyzed the situation well. However, he should also consider the fact that he saved $10 by only purchasing the shirt.
Opportunity cost is the cost of the forgone alternative. Out of the 3 choices, he only purchased 1 of the choices, the opportunity cost are the other two choices. However, he is still capable of buying the flip-flops costing $10 but he chose not to do so. He should consider it as a savings aside from it being a lost opportunity.
Answer:
1. LAND
All expenses that went into the preparation of a fixed assets such as land to make it available for use should be capitalized and this includes taxes.
2. EQUIPMENT.
As explained above, the expense here was incurred trying to get the machinery to be available for use so it should be capitalized.
3. EQUIPMENT.
The same logic as the above stands here as well.
4. LAND IMPROVEMENTS.
This expense does not fall under the primary purpose for which the site was acquired but is still an improvement so even though it will not be capitalized to land, it goes to Land Improvements.
5. EQUIPMENT.
The name and slogan are part of the preparation of the vehicle for use so need to be capitalized.
6. EQUIPMENT.
Installation costs are to be capitalized because they are necessary to ge the asset working.
7. PREPAID INSURANCE.
Period costs (costs that provide benefits for a year or less) are to be expensed and not capitalized which is why this is posted to prepaid insurance.
8. LICENSE EXPENSE.
Licenses typically last a year so this is a period cost that should be expensed.
Answer:
C : decreased by $4,000
Explanation:
As we know that
The accounting equation is
Total assets = Total liabilities + stockholder equity
To balance the balance sheet we use the accounting equation
That means the total assets is equal to the sum of the total liabilities and the stockholder equity
Since in the given situation, the assets decreased by $4,000 or if the stockholder equity has increased by $4,000 so the total assets must also decreased by $4,000 itself
Answer:
$2200
Explanation:
The reason is that the property owned by the seller was 5 and half year starting from first of January to 15th of June. This means that 5.5/12 share of the total property tax relates to the seller and the remainder 6.5 months of total 12 months relates to the buyer of the property.
Hence the property tax for:
Seller = 5.5 / 12 * $4800 = $2200
Buyer = 6.5 / 12 * $4800 = $2600
Ratio method is used above to calculate the relevant shares of each party.
Answer:
Monopolistic competition
Explanation:
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