Answer:
Our company will recognize the loss on its next statement date.
Explanation:
The exchange rate between two currencies is the rate at which one can be exchanged for the other during trade.
The stronger a currency the less of it will be involved in the exchange, while the weaker the currency the more of it will be required in the exchange.
In this instance the transaction is Euro based. When the payable was incured the rate was $1.2 to €1.
Now the rate has increased to $1,27 per €1. This implies that the company will lose 1.20 - 1.27= -$0.07 per every Euro.
This loss will be recorded on the next statement date.
Answer:
Explanation:
The journal entry is shown below:
Accumulated Depreciation A/c 21,240
Computer A/c $3,894
To Truck A/c $23,600
To Cash A/c $590
To Gain on exchange A/c $944
(Being the exchange recorded)
The gain on exchange would be
= $21,240 + $3,894 - $590 - $23,600
= $944
The debit and credit is always matched
2741.67 * 12 = 32900.04 <span>FICA rate is 7.65% </span><span>32900.04 * .0765 = 2516.85 </span>
Answer:
B. is the marginal cost of the producing subsidiary
Explanation:
The subsidiary company will not sale at loss. Their transfer price should be at least enough to cover the additional cost generated for the units sold to parent company.
a.- the sales price do not alter the cost.
c.- the marginal cost can be determinated, as is the cost of producing an additional units forthe relevant range of capacity for the subsidiary company.
d.- if the subidiary sales at monopoly price, it will be increasing his profit by selling a higher price and lower quantity. That is not profitable for the parent company which, is what we are looking for.