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Margaret [11]
3 years ago
8

In year 2, Rossman Corp, changed its inventory method from FIFO to the weighted average method. The change resulted in a decreas

e in beginning inventory for year 2 of $10,000. What were the income statement effects of this change?
Earnings per share for year 1 decreased
Business
1 answer:
Mila [183]3 years ago
5 0

Answer:

True

Explanation:

The reason is that the opening inventory value of year 2 is the closing amount of the year 1. Its similar to the closing cash amount left in till at the end of year 1 is the opening amount at the year 2. So the opening inventory of year 2 is closing inventory of year 1. This means the closing inventory of year 1 has decreased by $10,000.

As we know that:

Cost of goods sold = Op. Inventory + Purchases - Cl. Inventory

This means if the closing amount increases the cost of goods decreases and in the given scenario the closing inventory of year 1 has been decreased which means that the cost of goods sold has increased which will decrease the profit. And if the profit decreases then:

Earning per share = Profit after tax (Decreased) / Number of share (Same)

As the profit has decreased the earning per share will also decrease.

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Inflation can decrease _____, which reduces the amount of goods and services a person can afford
PtichkaEL [24]
Inflation is the situation in which the same amount of money is worth less- meaning that it will have less purchasing power (so one can buy less for 100 dollars now than 10 years ago) - the correct answer is "purchasing power". Lower purchasing power reduces the number of goods that people can afford.
7 0
3 years ago
Read 2 more answers
Thomlin Company forecasts that total overhead for the current year will be $11,898,000 with 156,000 total machine hours. Year to
weqwewe [10]

Answer:

Predetermined manufacturing overhead rate= $76.27 per machine hour

Explanation:

Giving the following information:

Thomlin Company forecasts that total overhead for the current year will be $11,898,000 with 156,000 total machine hours.

<u>To calculate the predetermined manufacturing overhead rate we need to use the following formula:</u>

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

Predetermined manufacturing overhead rate= 11,898,000 / 156,000

Predetermined manufacturing overhead rate= $76.27 per machine hour

4 0
3 years ago
Production 54,000 units 60,000 units Machine-hours 985 hours 1,800 hours Fixed overhead costs for September $53,400 $90,000 The
Juli2301 [7.4K]

Answer:

The fixed overhead production-volume variance is $9,000 U

Explanation:

In this question, we are tasked with calculating the fixed overhead production-volume variance.

We start by calculating the fixed overhead applied to production.

mathematically that is equal to : 54,000 * 0.03 * 50 = 81,000

The budgeted fixed overhead = 90,000

Mathematically,

Fixed overhead production-volume variance = Budgeted fixed overhead - fixed overhead applied to production = 90,000 - 81,000 = $9,000 U

6 0
3 years ago
6.<br> with a traditional bank, who is bearing the risk of the borrower defaulting?
Vikki [24]
The lender is bearing the risk on defaulting the loan
4 0
3 years ago
Yowell Company began operations on January 1, Year 1. During Year 1, the company engaged in the following cash transactions: 1)
Luba_88 [7]

Answer:

$9,500

Explanation:

The cash flow statement categories the company's transactions in a financial period into 3 groups; these are operating, investing and financing.

The net profit/loss, depreciation, changes in current assets (other than cash) and liabilities are considered as operating activities including income taxes.  

The sale of assets, interest received, purchase of investments are examples of investing activities while the issuance of stocks, debt principal deduction (loan settlement), issuance of debt securities etc are examples of financing activities.

An increase in assets other than cash is an outflow while an increase in liabilities is an inflow. Depreciation and other non-cash expenses deducted in the income statements are added back while the non-cash income such gain on asset are deducted from net income.

Yowell's net cash flow from operating activities

= $44,000 - $10,500 - $24,000

= $9,500

Other transactions will be stated in the investing and financing sections of the cash flow statements

7 0
4 years ago
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