If this is a true or false question, then yes, it is <u>true</u> that the selection of the factory overhead allocation method is important because the method selected determines the accuracy of the product cost.It is important to determine the appropriate method to allocate overhead in a certain factory so as to ensure that the cost of a product is suitable and accurate.
Answer:
When the purchase price is lower than the fair market value, accountants generally refer to this as negative goodwill. All negative goodwill must be reported as a gain.
the net fair market value of assets = $1,069,200 + $2,494,800 - $594,000 = $2,970,000
gain = fair market value - purchase price = $2,970,000 - $2,178,000 = $792,000
Another way to refer to this type of situation is a bargain purchase.
Answer: Asset Transformer
Explanation: The above is an example of asset transformation by Morgan Stanley. The transaction itself is an example of a primary market transaction.
An asset transformers (Morgan Stanley in this case) are involved in the conversion of risky assets (IBM stocks, in this case) into safer assets by creating and selling assets with risk characteristics that investors are more comfortable with (E.g. Mutual funds). The funds acquired by selling these assets are used to purchase other assets that may have for more risk and possibility for higher returns.
Answer:
M = $3.20
N = $9.95
O = $5.21
I believe it is the second option.
Explanation:
Item No. of Items Purchased Resale Price Per Unit
M 4,600 $4.05
N 2,300 $12.60
O 6,600 $6.60
total resale price:
- M = 4,600 x $4.05 = $18,630
- N = 2,300 x $12.60 = $28,980
- O = 6,600 x $6.60 = $43,560
- total = $91,170
markup % = ($91,170 - $72,000) / $72,000 = 26.625%
purchase cost per unit:
- M = $4.05 / ( 1 + 26.625%) = $3.20
- N = $12.60 / ( 1 + 26.625%) = $9.95
- O = $6.60 / ( 1 + 26.625%) = $5.21
Answer:
True
Explanation:
Unearned revenue is cash received from a customer before goods are delivered or services offered. It is an amount received for work that is not yet done. Unearned revenue is a liability to the business. It may also be called deferred revenue.
As per the accruals principle, revenue is recognized when the time when an economic activity that generates income has happened. A sale of either a service or good has to happen, or the business has to incur an expense. A payment whose work is yet to be done is not recognized as revenue. The journal entry is to debit to the cash account and credit the unearned revenue account.
