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Ferrier Chemical Company makes three products, B7, K6, and X9, which are joint products from the same materials. In a standard b

Advocard [28]

Answer:

Ferrier Chemical Company

Allocation of the joint cost, using weight as the allocation base:

For B7 = $140,000 ($600,000*35,000/150,000)

For K6 = $300,000 ($600,000*75,000/150,000)

ForX9 = $160,000 ($600,000*40,000/150,000)

Allocation of the join cost, using market value:

For B7 = $78,750 ($600,000*$210,000/$1,600,000)

For K6 = $281,250 ($600,000*$750,000/$1,600,000)

For X9 = $240,000 ($600,000*$640,000/$1,600,000)

Explanation:

a) Data and Calculations:

Joint cost of a standard batch = $600,000

B7 K6 X9 Total

Pounds generated 35,000 75,000 40,000 150,000

Sales price per pound $6 $10 $16

Market value $210,000 $750,000 $640,000 $1,600,000

Allocation of the joint cost, using weight as the allocation base:

For B7 = $140,000 ($600,000*35,000/150,000)

For K6 = $300,000 ($600,000*75,000/150,000)

ForX9 = $160,000 ($600,000*40,000/150,000)

Allocation of the join cost, using market value:

For B7 = $78,750 ($600,000*$210,000/$1,600,000)

For K6 = $281,250 ($600,000*$750,000/$1,600,000)

For X9 = $240,000 ($600,000*$640,000/$1,600,000)

b) The market value for each product class is a function of the quantity produced multiplied by the sales price per unit.

4 0

4 years ago

Kendall Corp. purchased at par value $160,000 of Barker Company's 7% bonds that mature in 10 months. The bonds pay interest semi

lesantik [10]

Answer:

The correct answer is a. Debit Short-Term Investment for $160,000 and Credit Cash for the Same Amount.

Explanation:

Investments in Money Market Instruments, that is those instruments that mature within one year, are classified as Short-term Investments. Whereas, investments for a period of more than one year are termed as Long-term Investments. Since Kenall Corp. purchased bonds that will mature within one year, so such investment shall be classified under the head of Current Assets.

In-case of interest received semi-annually, Cash will be debited and Finance Income will be credited.

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8 0

4 years ago

Read 2 more answers

Decorative Concrete produces a concrete overlay for residential and commercial concrete flooring. Customers have complained that

forsale [732]

Answer:

Decorative Concrete

1. This contingent liability should be disclosed in a note only.

2. Decorative Concrete should not report any loss in its income statement, yet.

3. Decorative Concrete should not report any liability in its balance sheet, yet.

4. No entry should be recorded in the journal.

Explanation:

a) Data and Calculations:

Estimated loss = $1.1 and $4 million

Loss is probable but the loss cannot be reasonably estimated

b) Decorative Concrete cannot reasonably estimate the loss that may arise from the contingent liability. Therefore, it should only disclose the future event in a note to the financial statements. Accounting rules specify that Decorative Concrete should record this event as a contingent liability in its accounts when it is probable that the future event will occur and the amount of the liability can be reasonably estimated. At that time, a specific amount of loss will be recorded (debit) and a specific liability established (credit) in advance of the settlement. In this Decorative's case, only one condition is met.

6 0

3 years ago

When the mortgage rates get high, the housing market will collapse, as fewer people will take loans for buying houses because of

elena-s [515]

Loss in profit for the housing market.

6 0

4 years ago

The equation which shows a company’s resources equal claims to those resources is___________.a.Assets = Liabilities + Stockholde

777dan777 [17]

<h2>Assets = Stock holder's Equity + All outsider Liabilities</h2><h3>Explanation:</h3>

Assets = All Short term Assets + All Long Term Assets

Short term Assets are those assets which can be easily recovered into cash with in one year

Long term assets are those which can be recovered after one year

Liabilities = Short term + Long term (Outsider Liabilities)

Short term liabilities are those which is to be paid within one year

Long term liabilities are those which is to be paid after one year

7 0

4 years ago