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Korvikt [17]
3 years ago
11

Guns R Us overstated its ending inventory in the current year by $5,000. The company incorrectly reported $100,000 of net income

. Explain the consequences of this error on the current period's income statement.A. Cost of goods sold will be too high by $5,000.
B. Cost of goods sold will be too low by $5,000.
C. The correct net income amount should have been $105,000.
Business
1 answer:
soldi70 [24.7K]3 years ago
4 0

Answer:

B. Cost of goods sold will be too low by $5,000.

Explanation:

Overstatement in closing inventory has two effects. First in income statement, that the cost of goods sold is decreased by the same amount that is overstated. Second is overstatement of Inventory value in the asset section of balance sheet. According to the given scenario The effect of this event should be as cost of goods sold will be too low by $5,000.

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Graham Corp. has 1,000 cartons of oranges that were harvested at a cost of $30,400. The oranges can be sold as is for $36,400. T
Readme [11.4K]

Answer:

c. $3,600

Explanation:

The total cost of orange juice = $30,400 + $13,000

The total cost of orange juice = $43,400

So, the profit on the orange juice = $53,000 - $43,400 = $9,600

Profit when oranges are sold without juice = $36,400 - $30,400

Profit when oranges are sold without juice =  $6,000

So, extra income = $$9,600 - $6,000 = $3,600

Thus, the net benefit (additional income) from processing the oranges into orange juice instead of selling as is would be is $3,600

5 0
2 years ago
What kind of economy might a country have if it was influenced by Western thought
vova2212 [387]

Option;

A. communist

B. capitalist

C. democratic

D. republican

Answer: B. Capitalist

Explanation:

Capitalist economic system is one where the ownership and investment are distributed, the fluidity of her wealth and production which are made and maintained by individuals or corporation or by means of wealth which are state owned.

Example of capitalist countries include Switzerland, Australia, Estonia, Canada, United Arab Emirates amongst many others.

3 0
3 years ago
Bill enters into a contract with Tom to supply 100 umbrellas at $10.00 each. The umbrellas were to be delivered on August 20th.
mars1129 [50]

Answer:

Honestly, Bill Can not sue Tom

Explanation:

Firstly I don't know the contractual agreement between Tom and Bill, but based on the fact that Tom informed Bill of the latest happenings as regards the umbrella,

Hence Bill is well Informed.

Now Bill tested his umbrella and they were OK, it doesn't rule out the fact and the possibility of 14 out 100 to be bad, this can be in a form of factory error.

3 0
3 years ago
Which of the following should not be recorded in income and expenditure account?
kirill [66]

Answer:

C. honorarium paid to the secretary

Explanation:

6 0
3 years ago
Frankenstein Electric has a capital structure that consists of 60 percent equity and 40 percent debt. The company's long-term bo
Alexeev081 [22]

Answer:

Kd = 7%

Ke =      D1      +  g

        Po(1 - FC)

Ke =      $2            + 0.09

        $40(1 - 0.15)

Ke =       $2      +  0.09

              $34

Ke = 0.1488 = 14.88%

WACC = Ke(E/V) + Kd(D/V)(1-T)

WACC = 14.88(60/100) + 7(40/100)(1 - 0.40)

WACC = 8.928 + 1.68

WACC = 10.6%

Explanation:

In this case before-tax cost of debt is given. Cost of equity is expected dividend divided by current market price after flotation cost plus growth rate. WACC is calculated as cost of equity multiplied by the proportion of equity in the capital structure plus after-tax cost of debt multiplied by proportion of debt in the capital structure.

8 0
3 years ago
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