Answer:
B) liabilities.
Explanation:
When the payment is received from the customer before performing the services is known as unearned service revenue
The journal entry is
Cash A/c Dr XXXXX
To Unearned Service revenue A/c XXXXX
(Being advance payment is received)
We simply debited the cash account as cash is received and credited the respective account i.e unearned service revenue
Answer:
The answer is: Yes, it's a decreasing cost industry.
Explanation:
Currently the total cost per unit is:
- $130,000 / 125,000 bottles = $1.04 per bottle
If the total costs increase by $5,000 for every 25,000 extra bottles produced, then the total cost per unit is:
- $135,000 / 150,000 bottles = $0.90 per bottle
If the bottle production keeps increasing to 175,000 bottles, the total costs will only increase by $5,000. So the total cost per unit is:
- $140,000 / 175,000 bottles = $0.80 per bottle
So as the production level increases, the cost per unit decreases.
Answer:
a) For this case we want to find an equation on the following form:
And if we use excel as we can see on the figure attached the best model is:
b) For this case we can use the relative change in order to calculate the % of variation between 2010 and 2017:
c) If we use the model created we just need to replace x =8 and we got:
And the difference respect the observed values is:
Explanation:
For this case we have the following data, let X= the amount of years since 2009. Because if we select starting from 0 the natural log of 0 not exists.
t x y
2010 1 92.0
2011 2 101.0
2012 3 112.0
2013 4 124.0
2014 5 135.0
2015 6 149.0
2016 7 163.0
2017 8 180.0
Part a
For this case we want to find an equation on the following form:
And if we use excel as we can see on the figure attached the best model is:
Part b
For this case we can use the relative change in order to calculate the % of variation between 2010 and 2017:
Part c
If we use the model created we just need to replace x =8 and we got:
And the difference respect the observed values is:
Answer: Outflow of cash
Explanation: Outflow of cash refers to those transactions that results in expenditure of company and outgoing of cash from the organisation. Inventory refers to those short term assets, that are purchased by the entity with the intent of reselling to make profit.
Hence, if the inventory has been increased, then it is an expenditure to the entity which results in outflow of cash.
Answer with explanation:
Part 1. Straight-line depreciation can be calculated using the following formula:
Straight-line depreciation = (Cost of Asset - Residual Value) / Useful Life
Now by putting the values of each parameter, we have:
Straight-line depreciation = ($135,000 - Zero) / 5years = $27,000
So this depreciation will be charged to the asset to remainder of its life.
Part 2. We can calculate depreciation using double declining balance method whose formula is as under:
Double Declining Balance Depreciation = 2 X Cost of the asset/Useful Life
By putting values, we have:
Double Declining Balance Depreciation = 2 * $135,000 / 5 Years = $54,000
The depreciation would be charged each year unless it fells below the salvage value of the asset, which in this question is given and is zero.
Part 3.
Following are the main questions that we must consider before opting to any depreciation method:
- Does the cost of the asset chosen is accurate and in-accordance to International Financial Reporting Standards.
- Does the estimated Residual value of the asset is forecasted accurately. International accounting standard IAS 16 says that the scrap value must be discounted and its present value must be considered as a scrap value.
- Is the useful life of the asset estimated is in-accordance to the pace of technological advances?
- The asset's fair value must be considered each year to analyze whether or not the asset value in the market is aligned with our carrying value calculated or not.
So these were the factors which decides which method of depreciation must be opted or what estimate changes are required in calculating the fair value of the asset.