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
[The following information applies to the questions displayed below.]
makvit [3.9K]

Answer:

A. Dr Raw meat Inventory 120,000

Cr Cash 120,000

B. Dr Indirect Materials $186,000

Cr Raw Materials $186,000

C. Dr Direct Materials $15,000

Cr Raw Materials $15,000

Explanation:

Preparation for the journal entries for the above transactions for the month of May.

Dr Raw meat Inventory 120,000

Cr Cash 120,000

(Being to record Raw materials purchases for cash)

B. Dr Indirect Materials $186,000

Cr Raw Materials $186,000

($201,000 - 15,000)

C. Dr Direct Materials $15,000

Cr Raw Materials $15,000

8 0
3 years ago
Jacob wants to invite 20 friends to his birthday, which will cost his parents $250. If he decides to invite 15 friends instead,
ehidna [41]
The answer would be 187.50

250 $ for 20 friends would be $12.50 per friend. So, 12.5 x 15 = $187.50
4 0
3 years ago
Are contractually-stipulated cooperation programs between unions and management a realistic and workable concept? Why or why not
krok68 [10]
<span>Yes these contractually-stipulated programs between the both parties are actually a realistic and workable concept. It is important for both union and employer because when there is a situation of disagreement this contract will provide a resolution to both of them saving time and resources.</span>
4 0
4 years ago
Most goods and services produced at home a. and most goods and services produced illegally are included in GDP. b. are included
katen-ka-za [31]

Answer:

Most goods and services produced at home are included in GDP while most goods and services produced illegally are excluded from GDP.

Explanation:

The United states Gross Domestic Product is measured including only the production of legal goods and services within a given year. This means that all goods and services for previous year are not taken into account as well of illegal products or services.

7 0
4 years ago
Read 2 more answers
Do you think it is easier or harder to be ethical in a leadership role?​
love history [14]
Ethically probably harder,
8 0
3 years ago
Other questions:
  • ​if an employee feels she is underpaid for the effort she exerts, she will probably:
    10·1 answer
  • Blossom Electric sold $3,800,000, 8%, 10-year bonds on January 1, 2020. The bonds were dated January 1 and pay interest annually
    12·1 answer
  • How can the owners of Antoun Hair Salon determine whether they made a
    13·1 answer
  • Urban Window Company had gross wages of $309,000 during the week ended July 15. The amount of wages subject to social security t
    11·1 answer
  • Campbell Soup Co. found that its canned nacho cheese sauce, which could be heated and poured directly onto nacho chips, was too
    11·1 answer
  • Terrence contributed $15,000 to a foreign charitable organization. At the time of the contribution, the organization told him th
    7·1 answer
  • Suppose that, in a competitive market without government regulations, the equilibrium price of gasoline is $3.00 per gallon.Sele
    13·1 answer
  • Risser Woodworking Corporation produces fine cabinets. The company uses a job-order costing system in which its predetermined ov
    14·1 answer
  • Apart from a subsidy, how might a government change the market price of a good?​
    7·1 answer
  • Suppose Americans buy inputs from foreigners. When the price of foreign inputs falls, the U.S. SRAS curve __________, which tend
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!