Answer:
The investor must find Current Ration and Quick Ratio.
Explanation:
The reason is that the current ratio tells that how much of the current assets are financed from the current liabilities. This gives a better understanding of the financing of the working capital through current liabilities. The quick ratio does the same but the effect of the inventory is eliminated.
Answer:
Total cost of purchase= $3,995
Explanation:
<u>To calculate the total cost of merchandise purchased, we need to use the following structure:</u>
Invoice cost of merchandise purchase
Less:
Purchase discount
Returns and allowances
Add:
Transportation costs
<u>In this case:</u>
Invoice cost of merchandise purchase= 4,000
Purchase discount= (4,000*0.02)= (80)
Returns and allowances= (275)
Transportation costs= 350
Total cost of purchase= $3,995
The formula is
Assets=liabilities+owner's equity
Assets=18000+21000
Assets=39000
Hope it helps!
Answer:
The effect of this error on 2003 ending working capital is that it overstated the ending 2003 working capital.
The error does not have effect on the 2004 ending retained earnings balance.
Explanation:
Let the amount of the commission expense be xxxx.
At the end of 2003, the journal entries should have been as follows:
Debit Commission expense for xxxx
Credie Commission payable for xxxx
Also, we have:
Working capital = Current assets – Current liabilities ………… (1)
From equation (1), current liabilities are understated because commission payable which was not recorded is an item under current liabilities. Since the current liabilities are understated, that indicates that the working capital in equation is overstated. Therefore, the effect of this error on 2003 ending working capital is that it overstated the ending 2003 working capital.
When the 2003 commission expense in the entries above was paid in 2004, it would have been recognized as an expense. This made the error to counterbalance. This implies that the 2004 ending retained earnings balance is still correct despite that there are errors in the earnings of the two years. Therefore, the error does not have effect on the 2004 ending retained earnings balance.
<span>Microsoft's risk management model includes "probability".
</span>
Microsoft works in a focused, high-risk business, with quickly propelling innovation and regularly shortening item life cycles. In that unique circumstance, Microsoft's hazard administration group looks to develop and actualize an undertaking wide risk management framework. Microsoft's risk management was set up in 1997.
