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____ [38]
3 years ago
11

In 2018, CPS Company changed its method of valuing inventory from the FIFO method to the average cost method. At December 31, 20

17, CPS's inventories were $32 million (FIFO). CPS's records indicated that the inventories would have totaled $23.8 million at December 31, 2017, if determined on an average cost basis.
Prepare the journal entry to record the adjustment. (Ignore income taxes.) (Enter your answers in millions (i.e., 5,500,000 should be entered as 5.5). Round your answers to 1 decimal place. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Business
1 answer:
MaRussiya [10]3 years ago
4 0

Answer:

Dr Retained earnings $8.2

Cr Inventory $8.2

Explanation:

By changing method of an inventory valuation, the company should apply it retrospectively based on IAS 8 guidelines on change in accounting estimates and errors. Thus, the said difference from FIFO method to Weighted Average method of valuation should be credited directly against Retained earnings account because, accounts are already closed right after the year ended.

$32-$23.8= $8.2 million

To record the said adjustment you have to

Debit Retained earnings and credit Inventory in the amount of $8.2 million.

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So you can retire early, you have decided to start saving $500 a month starting one month from now. You plan to retire as soon a
Mashcka [7]

Answer:

It will take him 45 years

Explanation:

In this question, we are asked to calculate the number of years it would take to accumulate $1,000,000 if there is a plan to save $500 per month at an interest rate of 5%.

To solve this, we use the following mathematical formula:

Future value of annuity = Annuity payment * {(1+r)^n - 1}/r

Where r is the monthly interest rate and n is the number of months it will take.

From the question, we can identify the following;

Since he earns 5% interest on savings, the actual monthly interest rate will be 5%/12 = 0.4167% = 0.004167

Annuity payment = monthly payment = $500

Future value of annuity = $1,000,000

We substitute these values into the equation:

1,000,000 = 500 * [(1+0.004167)^n - 1]/0.004167

8.334 = (1.004167)^n - 1

1+8.334 = (1.004167)^n

9.334 = (1.004167)^n

To get n, we simply take the log on both sides of the equation

Log 9.334= nLog 1.004167

n = Log9.334/Log1.004167

n = 537 months

Question asks to calculate in years

there are 12 months in a year. The number of years it will take will be 537/12 = 44.76 years and that’s approximately 45 years

8 0
3 years ago
Approximately ________ percent of the federal budget is in the mandatory spending category
Goshia [24]

The answer is 9%. According to the CBO, defense expenditure grew 9% yearly on average from fiscal year 2000-2009. Much of the costs for the conflicts in Iraq and Afghanistan have not been subsidized through regular arrogations bills, but over emergency supplemental appropriations bills.

6 0
3 years ago
Bennett Co. has a potential new project that is expected to generate annual revenues of $255,800, with variable costs of $141,20
Mandarinka [93]

Answer:

b. $124,120

Explanation:

4 0
3 years ago
An investment, which is worth 26,800 dollars and has an expected return of 4.28 percent, is expected to pay fixed annual cash fl
Dennis_Churaev [7]

Answer:

Present Value =  $22,663.69

Explanation:

<em>The present value of a sum expected in the future is the worth today given an opportunity cost interest rate. In another words ,it is amount receivable today that would make the investor to be indifferent between the amount receivable today and the future sum.</em>

The present value of a lump sum can be worked out as follows:

PV = FV × (1+r)^(-n)

PV - Present value - ?

FV - Future value - 26,800

r- Interest rate per period - 4.28%

n- number of periods- 4

PV = 26,800 × (1.0428)^(-4)=22,663.69

PV =  $22,663.69

7 0
3 years ago
The Baldwin company will sell 100 units (x1000) of capacity from their Baker product line. Each unit of capacity is worth $6 plu
yKpoI14uk [10]

Answer: $2,210,000

Explanation:

From the question, we are informed that the Baldwin company will sell 100 units (x1000) of capacity from their Baker product line and that each unit of capacity is worth $6 plus $4 per automation rating.

We are further told that the Baldwin company will sell the capacity for 35% off. The amount they'll receive when the capacity is sold will be:

The cost per unit will be

= 6 + (4 × 7)

= 34

The worth of the capacity will now be:

= 100000 × 34

= 3,400,000

The amount received will be:

= 3400000 × (1-35%)

= 3400000 × 0.65

= $2,210,000

3 0
3 years ago
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