All categories

2 years ago

Q 9.37: when should the gross profit method of inventory valuation not be used because it is invalid?

1 answer:

5 0

At the end of given period the gross profit method is required to estimate inventory.The valuation become invalid when the following are not available.the value for the beginning of inventory,records of purchase made, the total sale during the period and the gross profit margin.

You might be interested in

Coronado Industries can sell all the units it can produce of either Plain or Fancy but not both. Plain has a unit contribution m

Step2247 [10]

Answer:

It will be better to produce all the units of Plain we can sell, then use any remaining machine hours to produce Fancy. This is because Plain, generated more contribution per hour than Fancy.

Explanation:

We have to calculate the Contribution Margin per machine hours

This means check which product makes a better use of the scarse resourse

$\frac{Plain\: CM}{Plain \: Machine \: Hours } = CM \: per \:Machine\:Hour\\\\ 80 \div 2 = 40$

$\frac{Fancy\: CM}{Fancy\: Machine \: Hours } = CM \: per \:Machine\:Hour\\\\ 93 \div 3 = 31$

It will be better to produce all the units of Plain we can sell, then use any remaining machine hours to produce Fancy

6 0

3 years ago

From the beginning of 2000 until its peak in 2012, Apple’s stock price rose from $27.97 to $702.10, an increase of 25 times. Yet

Tcecarenko [31]

Answer:

Steve Jobs coming back, Innovations, and Tim Cook taking over as COO

Explanation:

The fluctuations in stock prices of a company are due to improved performance of the company in meeting it's objectives and perception that the business will do better in the future.

In the given scenario there was an initial increase in Apple’s stock price from $27.97 to $702.10, an increase of 25 times.

This can be attributed to the return of Steve Jobs as the CEO of Apple. There was a confidence boost by his coming back. Also there were various innovations like: iPhone, iMac, iPod, and iTunes. These improved the performance and by extension share price of Apple.

However when Tim Cook took over as COO he reduced production by half resulting in stock price decrease by 37% from its peak in September 2012 until the end of March 2013, from $702.10 to $442.66.

3 0

3 years ago

As the Chief Financial Officer for a metal refinery, Kaylee disagrees with using a turnkey strategy to enter into the Asian mark

denpristay [2]

Answer:

Take a minority equity interest in the operation.

Explanation:

Multiple Choice

a) Sell competitive advantage to competitors.

b) Agree to import another product from the Asian market.

c) Take a minority equity interest in the operation.

d) Withhold vital process technology from the local firm.

e) Establish a franchise operation.

A turnkey strategy is a market entry position where the project is built from the ground up and turned over to the client ready to go – turn the key and the plant is operational. This is a very good way to enter foreign markets as the client is normally a government. While when one takes a minority equity interest they do not have the votes to control the operations and finances of the the company’s business.

Kaylee, the Chief Financial Officer for a metal refinery, Kaylee reasons that the company doesn't have longterm interest in the Asian market advises to take a minority equity interest in the operation in order not to lose financially.

4 0

2 years ago

Following is information on two alternative investments being considered by Jolee Company. The company requires a 12% return fro

goblinko [34]

Answer:

Project A Project B

Initial investments ($170,000) ($115,000)

CF Year 1 $42,500 $34,500

CF Year 2 $58,500 $52,500

CF Year 3 $82,795 $68,500

CF Year 4 $92,900 $68,500

CF Year 5 $67,500 $68,500

using an excel spreadsheet and the IRR function, the internal rate of return of each project is:

Project A's IRR = 26.02%
Project B's IRR = 36.31%

We can use the discount rate (12%) to calculate the projects' NPV, we do not need it to calculate their IRR:

Project A's NPV = $70,855
Project B's NPV = $88,815

6 0

2 years ago

Jacques deposited $1,900 into an account that earns 4% interest compounded semiannually. After t years, Jacques has $3,875.79 in

kupik [55]

A year has two semesters, then
n = 2v(t)=p(1+r/2)2t

3875.79 = 1900∗(1+(0.04/2))^2t

2.0398895 = (1+0.042)^2t
Apply natural logarithm on both sides

ln(2.0398895) = ln[(1+0.042)^2t]

Then simplify,
0.712896 = 2t∗ln(1.02)

t = 0.712896 / (2∗ln(1.02))

t=18 years

I hope my answer helped you. Have a nice day!

3 0

3 years ago

Read 2 more answers