Answer:
C- $3,400
Explanation:
The Karla Salons has leased equipment from Smith Co. in a finance lease. The Smith Co will record the interest receivable from the Karla Salons in its income statement. The Karla Salons will record lease obligations in its balance sheet. Under the new ASU, the interest revenue which Smith Co. will record in its income statement is $3,400 for the year 2016.
Answer:
a. Overstates Year 1 cost of goods sold.
b. Understates Year 1 net income
c. Understates Year 2 cost of goods sold
Explanation:
a. The formula for Calculating the Cost of Goods sold is;
<em>Cost of Goods Sold = Opening inventory + Purchases - Closing inventory.</em>
If the closing inventory is understated, it will reduced the amount being subtracted from Purchases and Opening inventory which would means that Cost of Goods sold will be overstated.
b. The Cost of goods sold is deducted from sales to give Gross profit. If Cost of goods is overstated, it will reduce Gross Profit higher than it should. A lower Gross Profit equates to a lower Net Income.
c. Going by the formula in <em>a;</em>
<em>Cost of Goods Sold = Opening inventory + Purchases - Closing inventory.</em>
In Year 2, the understated Year 1 closing stock will become the understated Year 2 Opening stock. With the opening stock understated, the Cost of goods will be understated as well because Opening stock is meant to increase Cost of goods sold as the formula shows. If it is understated, the amount that it will add will be understated as well.
Because the conduct of purchasers and merchants will naturally manage the market toward the balance cost and amount.
Economic equilibrium is a condition or state in which financial strengths are adjusted. Financial harmony may likewise be characterized as the time when supply measures up to interest for an item, with the balance cost existing where the theoretical free market activity bends cross.
Answer:
A. Those responsible for complying with budgets must participate in budget preparation.
Explanation:
An important rule of budgeting is those responsible for complying with budgets must participate in budget preparation.
Answer:
Process capability evaluation allows us to:
a. check customer requirements against what a process is able to achieve.
Explanation:
Process capability evaluation involves the set of tools used to analyze the performance of a given process against desired specifications. This means that it measures how well a process performs against targets. There are different measures of process capability. For example, Sigma Six is used as a process capability evaluation. Process capability index is also used to evaluate a process' capability, where the upper and lower limits are measured.
