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Zigmanuir [339]
3 years ago
13

Below are three independent and unrelated errors. On December 31, 2017, Wolfe-Bache Corporation failed to accrue office supplies

expense of $1,800. In January 2018, when it received the bill from its supplier, Wolfe-Bache made the following entry: Office supplies expense 1,800 Cash 1,800 On the last day of 2017, Midwest Importers received a $90,000 prepayment from a tenant for 2018 rent of a building. Midwest recorded the receipt as rent revenue. At the end of 2017, Dinkins-Lowery Corporation failed to accrue interest of $8,000 on a note receivable. At the beginning of 2018, when the company received the cash, it was recorded as interest revenue.For each error:1. What would be the effect of each error on the income statement and the balance sheet in the 2017 financial statements?2. Prepare any journal entries each company should record in 2018 to correct the errors.
Business
1 answer:
vampirchik [111]3 years ago
6 0

Answer & Explanation

A)            Wolfe-Bache Corporation

Expenses will be understated thus, net income overstated.

In the balance sheet this makes assets Office supplies be overstated as it wasn't adjusted and retained earnings as well.

Prior Period Adjustment   1,800 debit

           Supplies                           1,800 credit

--to adjust supplies and recognize prior period results--

B)                Midwest Importers

rent revenue overstated thus, income statement overstated.

in the balance sheet Retained Earnings will be overstated as well.

While liabilities for the paid in advance rent will not exit thus, understated

Prior Period Adjustment   90,000 debit

           unearned revenue                 90,000 credit

--to adjust for unearned revenue on previous periods--

C)              Dinkins-Lowery Corporation

interest revenue will be understated thus, income statement as well.

In the balance sheet the note receivable net balance will be understated and so the equity as retained earnings is understated.

Prior period adjusment      8,000 debit

         interest receivable                  8,000 credit

--to adjust for missing year-end adjusting entry--

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Which of the following statements explains the concept of the tragedy of the​ commons? ​(Check all that apply.​) A. It occurs du
mart [117]

Answer:

C. It results when the free market equilibrium quantity is higher than the optimal equilibrium quantity.

D. The open access to common resources results in their depletion through overuse.

Explanation:

The tragedy of the commons is a problem in economics that could be arise at the time when an individual reject the society well being for the personal motive. It would result in excess consumption and the depletion of the resources

So as per the given options, the option c and option d is to relevant as it directly linked to the meaning of the tragedy of the commons

5 0
3 years ago
Suppose that you enter into a short futures contract to sell July silver for $17.20 per ounce. The size of the contract is 5,000
ivanzaharov [21]

Answer:

$0.20

Explanation:

For computing the change in future price, first we have to determine the loss which is shown below:

Loss = Initial Margin - Maintenance Margin

        = $4,000 - $3,000

        = $1,000

Now the change in future price would be

= Loss ÷ size of the contract

= $1,000 ÷ 5,000 ounces

= $0.20

The future price is increased by $0.20

And, if the margin call is not meet than the broker will stop at best price so that he cannot suffer more loss

7 0
3 years ago
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The federal government relies mostly on revenue from _____.
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The answer is INCOME TAXES. It is not sales tax. Just took the quiz on OW and got it right.

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You open a savings account with a 0.5% per year nominal interest rate, and the economy experiences 3% per year inflation. a. Wha
Firlakuza [10]

Answer:

a. The nominal interest rate is 0.5%, and the real interest rate is -2.5%.

b. The purchasing power of money in the account will reduce.

Explanation:

a. What is the nominal and real annual interest rate on the account? The nominal interest rate is %, and the real interest rate is %.

From the question, we have:

Nominal interest rate = 0.5%

Inflation rate = 3%

In economics, the real is interest rate is calculated as follows:

Real interest rate = Nominal interest rate - Inflation rate = 0.5% - 3% = -2.5%

Therefore, the nominal interest rate is 0.5%, and the real interest rate is -2.5%.

b. What will happen to the purchasing power of the money you place in the account over time? The purchasing power of money in the account will

From the question, the interest rate attached to the savings account is a nominal interest rate. Since the nominal interest rate, unlike the real interest rate, is an interest rate that is not adjusted for inflation, the purchasing power of money in the account will reduce.

3 0
3 years ago
Swiss Furniture Company manufactures bookshelves and uses an activityminusbased costing system. The following information is pro
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Answer:

$12.40

Explanation:

Activity           Estimated Indirect       Allocation Base      Estimated Q. of

                      Activity Costs                                               Allocation Base

<u>Materials handling $7,700                Number of parts     7,350 parts </u>

<u>Assembling          $10,500                Number of parts     7,350 parts </u>

Packaging              $2,410                 Number of units     1,470 bookshelves

The direct materials cost per bookshelf is $39. What is the cost of materials handling and assembling per​ bookshelf?

materials handling cost per part = $7,700 / 7,350 parts = $1.05

assembling cost per part = $10,500 / 7,350 parts = $1.43

total cost per part = $2.48

cost per bookshelf = 5 x $2.48 = $12.40

6 0
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