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Korvikt [17]
4 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]4 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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Collingsworth, Inc. produces 3 products: AKM, BWT, and CPQ. Product AKM requires 700 purchase orders, Product BWT requires 1,080
marusya05 [52]

Answer:

Allocated MOH= $100,800

Explanation:

<u>First, we need to calculate the predetermined allocation rate for ordering and receiving:</u>

<u></u>

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Ordering and receiving= 504,000 / (700 + 1,080 + 1,720)

Ordering and receiving= $144 per order

<u>Now, we allocate to product AKM:</u>

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 144*700

Allocated MOH= $100,800

5 0
3 years ago
This device blocks an opening along the base/floor of stairs or other walking or working surfaces where materials or body parts
RSB [31]

4 inches high, with not more than ¼-inch

clearance above the floor

5 0
3 years ago
has a standard of 2 direct labor hours per unit. The standard wage rate of each worker is $32.50 per hour. In July, the company
ikadub [295]

Answer:

$130 Favourable

Explanation:

Given the above information,

Standard hours = 2 × 4770 = 9,540

Actual hours = 8,940

Standard rate = $32.50

Then, Direct labor efficiency variance is computed as

= ( Standard hours allowed for production - Actual hours taken) × Standard rate per direct labor hour

= [(2 × 4,770) - 8,940] × $32.50

= [9,540 - 8,940] × $32.50

= 600 × $32.50

= $130 Favourable

6 0
3 years ago
Which of the following items is included in the financing activities section of the statement of cash flows?
Lyrx [107]

Option B, Cash effects of transactions obtaining resources from owners and providing them with a return on their investment.

Explanation:

Option "A" is incorrect because loans are transacted and collected depending on the nature of the activity.

Option "C" is wrong because investment activity covers procurement and disposal of investment and property and equipment.

Option "D" is wrong since transfers of cash to net income would be subject to operations

The financial transactions in the cash flow statement depends on how a company receives money and returns the capital market back to creditors. These activities include the payment of cash dividends, the addition or change of loans, or the issuance and sale of more stocks.

3 0
3 years ago
Jones &amp; Hilton Co. owned a large cold storage warehouse where they stored and processed meat and meat products. An insider r
8090 [49]

Answer:

4. U.S. Department of Agriculture

Explanation:

The U.S. Department of Agriculture, one of the most powerful executive departments in the United States, has as one of its functions the responsability to ensure food safety.

For this goal, it has one subdivision: the Food Safety and Inspection Service, which has over 9,000 employees across the U.S.

That is the specific department that would carry out the inspection, and initiate legal proceedings in case of irregularities. It is in charge of ensuring food safety for consumers in the places where food is manipulated, distributed, and sold.

4 0
3 years ago
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