Answer:
Cost incurred while running a restaurant:
Salary paid = $200,000 per year
Ingredients cost = $50,000 per year
Before running this restaurant, he was earning $150000 per year.
Here, we are using a concept called opportunity cost.
Opportunity cost refers to the benefit of a commodity that is forgone to produce one extra unit of some other commodity.
It is also refers to the value of next best alternative that is given up by choosing some other alternative.
In this question, opportunity cost of running a restaurant is the income that is earned when he was a lawyer, i.e, $1,50,000 per year. This is the income that is foregone when he started running a restaurant.
Answer:
LIFO conformity rule.
Explanation:
LIFO refers to the Last in first out method. In this inventory system, the firm sells last units at first stage and then sells according to that
According to the given situation, the LIFO conformity rule requires that the taxpayer follow the same inventory cost flow as used for tax reporting purposes in the financial statement.
Therefore the correct answer is LIFO conformity rule.
Answer:
the interest payable is $210,000
Explanation:
The computation of the interest payable is shown below:
= Principal payments × rate of interest × no of months ÷ total no of months × time period
= $350,000 × 6% × 6 months ÷ 12 month × 20years
= $210,000
hence, the interest payable is $210,000
The same should be considered and relevant
Answer:
The answer is "Option A"
Explanation:
RE stands for retained income, In this system also requires the net income to be used in the accounting and cash flows, while the statement of money flow, which is not released as dividends of shareholder value, is used instead for new investments within the company, and other options are were wrong that can be described as follows:
- Option B and option D are similar to each other because, both used for payment on personal and consumer loans, that's why it is not correct.
- In option C, It is used in the calculation, that's why it is not correct.
