An account that would be increased by debit is

On January 1, 2020, Novak Corp. had inventory of $56,500. At December 31, 2020, Novak had the following account balances.

salantis [7]

Answer:

Gross Profit ⇒ $296,500

Operating expenses ⇒ $153,500

Explanation:

Gross Profit;

= Net sales - Cost of Goods sold

Net sales = Sales revenue - sales discounts - sales returns and allowances

= 807,000 - 6,000 - 10,900

= $790,100

Cost of Goods sold

= Opening balance + Purchases + Freight-in - Purchase discounts - Purchase returns and allowances -closing balance

= 56,500 + 509,500 + 4,800 - 8,000 - 2,700 - 66,500

= $493,600

Gross Profit = 790,100 - 493,600

= $296,500

Operating Expense

Net Income = Gross profit - operating expenses

143,000 = 296,500 - operating expenses

Operating expenses = 296,500 - 143,000

= $153,500

6 0

2 years ago

Which of the following is a period during which aggregate output, as measured by real GDP, declines

Klio2033 [76]

Answer:

D. Recession

Explanation:

Aggregate output in an economy declines during a recession. This is because economic activities are declining. When such occurs GDP declines. This is different from stagflation in the sense that during a recession, only real GDP declines. However, in a stagflation, the fall in GDP also results to the increase in inflation. During recessions, economic activities are low so is price level.

4 0

1 year ago

RT is about to loan his granddaughter Cynthia $10,000 for 1 year. RT’s TVOM, based upon his current investment earnings, is 12%,

qaws [65]

Answer:

They should not be able to successfully negotiate the terms of this loan within these parameters.

Explanation:

It has been provided that RT earns 12% on his current investments and would not like to receive an interest rate of less than 12% on the loan he gives.

if RT gives a loan of $10,000 for one year, he would charge an interest rate of minimum 12%.

Interest = $10,000*0.12

= $1,200

RT requires $1,200 in interest.

It has been provided that Cynthia earns 8% on her investment.

If she borrows $10,000 and invests the amount for one year, she can earn 8% return on such amount.

Earning = $10,000*0.08

= $800

Cynthia is going to earn $800

RT requires a minimum of $1,200 as interest for 1-year loan he gives while Cynthia can pay a maximum of $10,000 as interest for 1-year loan she takes. there is mismatch between the minimum expectation to receive of lender and the maximum expectation to pay of borrower.

Therefore, They should not be able to successfully negotiate the terms of this loan within these parameters.

6 0

2 years ago

Suppose monetary neutrality holds and velocity is constant. A 5 percent increase in the money supply increases the price level b

Alex73 [517]

Answer: Increases the price level by 5 percent

Explanation:

Monetary Neutrality is a theory in Economics that posits that when there is a change in money supply in an economy, the only variables affected are the nominal ones like price level and wages and Real variables like GDP and employment are not affected.

It holds that when there is an increase in money supply, there is an equivalent increase in Price level as well because the value of money has fallen by the rate of the monetary increase. The Price level rising at the same rate is to compensate.

A 5 percent increase in the money supply will therefore increase the price level by 5 percent.

4 0

2 years ago

For purposes of computing the WACC, if the book value of equity exceeds the market value of equity, then: the market value of eq

vagabundo [1.1K]

Answer:

The market value of equity should be used.

Explanation:

Their are only two methods which are book value method or market value method. The market value method is preferred because the reason is that the market value gives the more accurate numerical value that the securities of the company will give which is the required rate of return to its investors. However historic cost data is not useful because the value of stock and bonds keeps changing every second in the stock exchange and their is the risk that the WACC calculated is inaccurate which implies that the project appraised is also incorrect.

So the best way to calculate the weighted cost of capital is that we should use the fair value of the securities.

5 0

3 years ago

Read 2 more answers