1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
OLga [1]
3 years ago
7

X Company and Y Company, operating on opposite sides of the country, manufacture equipment that is virtually identical except fo

r a higher grade of metal used by X Company. As a result, the costs and fair values of one piece of equipment to X and Y are: Cost Fair Market Value X Company $ 75,000 $ 105,000 Y Company $ 65,000 $ 91,000 X Company received an order from a customer in Y’s state and Y received an order from a customer in X’s state. In a transaction that lacks commercial substance, to avoid the cost and effort of shipping the equipment across the country, X and Y exchanged equipment and, essentially, X shipped to Y’s customer and vice versa. Due to the difference in metals, however, Y paid X $14,000 in cash.
How much profit will X Company recognize as a result of the exchange?
$0
$4,000
$14,000
$30,000
Business
1 answer:
Makovka662 [10]3 years ago
6 0

Answer:

$14,000

Explanation:

Company X                                               Company Y

cost per equipment $75,000                  cost per equipment $65,000

sales price $105,000                                sales price $91,000

Both companies sold one unit and they exchanged clients in order to reduce shipping cost:

company X income = $105,000 (selling price) - $75,000 (COGS) + $14,000 (money received from company Y) = $44,000

company Y's income = $91,000 (selling price) - $65,000 (COGS) - $14,000 (money given to company X) = $12,000

This exchange resulted in company X's income increasing by $14,000, while company Y's income decreased by $14,000

You might be interested in
Choose the answer.
Brrunno [24]

Answer:

the answer is reaserching

5 0
3 years ago
Customers learn to trust companies that consistently demonstrate good behavior. Those same companies can lose this position with
Luden [163]

Answer: True.

Explanation:

A business brand earns a customer's trust gradually with time, by consistency and honesty on the part of the business brand. This customer trust can easily be lost, if the business brand is engaged in even a little scandal or reckless act.

3 0
3 years ago
Xerox pioneered the first portable fax machine. In 1980, the price was $12,700. Xerox was using a(n) _____ strategy to help reco
34kurt

Answer:

c. skimming pricing

Explanation:

Based on the information provided within the question it can be said that in this scenario Xerox was using a skimming pricing strategy to help recover the cost of its research and development. This is a pricing strategy in which the company places a really high initial price for it's new product, but then goes lowering the price as time passes. This also makes individuals believe that they are getting a bargain when prices begin to drop and decide to buy more.

3 0
3 years ago
On July 1, 2020, Indigo Co. pays $9,400 to Sweet Insurance Co. for a 2-year insurance policy. Both companies have fiscal years e
aliya0001 [1]

Answer:

Explanation:

The journal entries are shown below:

On July 1

Prepaid insurance A/c Dr $9,400

    To Cash A/c $9,400

(Being the prepaid insurance for cash is recorded)

On December 31

Insurance expense A/c Dr $2,350

         To Prepaid insurance A/c $2,350

(Being the insurance expense is recorded)

The computation is shown below:

= Prepaid insurance amount ÷ number of years × number of months ÷ total number of months in a year

= $9,400 ÷ 2 years × 6 months ÷ 12 months

= $2,350

6 0
3 years ago
Which one of the following regarding the State Disability Insurance (SDI) program is true?
solmaris [256]

Answer:

B) The State Disability Insurance (SDI) program benefits received for a period of disability are not taxable as income, but benefits received for time off under the Paid Family Leave program are federally taxable as income.

Explanation:

Disability insurance benefits are not reported for tax purposes with one exception. If a person are receiving unemployment insurance benefits,

become unable to work due to a disability, and begin receiving disability insurance benefits, your disability insurance benefits are considered a substitution for your unemployment insurance benefits,  and will then be reported for tax purposes.

If disability insurance benefits are reported, a notice will accompany the first benefit payment sent to you advising  that the benefits are being reported to the Internal Revenue Service.  The employment development department will provide you with a 1099G tax form in January showing the reported amounts paid and forward a copy to the Internal Revenue Service.

Paid family leave benefits are reported for federal purposes but not state tax purposes.

Paid family leave benefits are not taxable or reported to the California State Franchise Tax Board.

4 0
4 years ago
Other questions:
  • What is an advantage of having an organization's data resources organized into a database?
    5·1 answer
  • Your sister recently opened a swanky three-floor cheese market, Fromagerie, which is quickly gaining attention from locals, the
    10·2 answers
  • Which section of the business plan contains information about the financial history of the company? A. Financial Analysis B. Fun
    11·2 answers
  • Avril Synchronistics will pay a dividend of $ 1.40 per share this year. It is expected that this dividend will grow by 7​% each
    6·1 answer
  • A disclosed principal is a principal whose identity is known by a third party with whom an agent contracts on the principal's be
    6·1 answer
  • To encourage employee ownership of the company's common shares, KL Corp. permits any of its employees to buy shares directly fro
    6·1 answer
  • Two mutually exclusive alternatives are being considered.
    15·1 answer
  • Has the taxpayer in each of the following situations received taxable income? If so, when should the income be recognized? Expla
    9·1 answer
  • Who plays f o r t n i t e
    9·1 answer
  • Fixed costs that usually arise from annual spending decisions by management are called?
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!