Answer and Explanation:
The journal entries are shown below:
a. Note receivable Dr $3,800,000
To Cash $3,800,000
(Being the acceptance of the note is recorded)
For recording this we debited the note receivable as it increased the assets and credited the cash as it decreased the liabilities
b. Interest receivable Dr $38,000
To Interest revenue $38,000
(Being the interest revenue is recorded)
For recording this we debited the interest receivable as it increased the assets and credited the interest revenue as it increased the revenue
The computation is shown below:
= $3,800,000 × 6% × 2 months ÷ 12 months
= $38,000
,
Answer:
$3,270
Explanation:
Inventory should be value at lower of cost and market value.
Bottles of CleanZ:
Cost of inventory = Bottles of CleanZ × Price per bottle
= 370 × $3
= $1,110
Market value of inventory:
= Bottles of CleanZ × Market value per bottle
= 370 × $3.20 per bottle
= $1,184
Lowest of cost and market value of inventory is $1,110.
Boxes of DyeZ:
Cost of inventory = Boxes of DyeZ × Price per box
= 270 × $10
= $2,700
Market value of inventory:
= Boxes of DyeZ × Market value per box
= 270 × $8 per box
= $2,160
Lowest of cost and market value of inventory is $2,160.
Therefore, the DyeZ. CurlZ should report its inventory at:
= Lowest of cost and market value of inventor for (CleanZ + DyeZ)
= $1,110 + $2,160
= $3,270
Answer:
1. Apart from helping to know the average cost of a product, analyzing fixed and variable cost will help to derive the break even point.
2. Profit will go down
Explanation:
1. The size of the selling price and the variable cost determine contribution per unit of a product. Contribution per unit is Price minus variable cost. This shows the contribution of sales revenue towards covering the fixed cost of a product.
2. Relevant range is the estimated or budgeted activity level which defines a business volume of production or operation, it is both maximum and minimum threshold within which the entity must operate to expect certain level of cost and revenue.
Sometimes fixed costs are fixed within a relevant range of activities and outside such range, fixed cost may become variable, which will all things being equal impact negatively on the price.
Also, within relevant range volume discount may be achieved and outside such range, this may be forfeited which, will also reduce profit all things being equal.
Answer:
D. The bank offers you a loan at 4% interest and a savings account that pays 5% interest.
Explanation:
<em>Arbitration</em> is a <em>financial strategy</em> that consists of the price difference between different markets on the same financial asset to obtain an economic benefit, usually without risk.
To perform arbitration, complementary operations (buy and sell) are carried out at the same time and wait for prices to adjust. The arbitration takes advantage of this divergence and obtains a risk-free gain. In other words, the arbitrajista is positioned short (sells) in the market with higher price and long (purchase) in the market with lower price. The benefit would come from the difference between the two markets.
What should be the basic goal of a firm when it sets a level of output?
The firm should make sure that it maximizes its profits. Maximizing profits means they are making the most they possibly can with the items they are selling or services that are being offered. When they make their overall goals, they need to make sure they are going to be making as much as they possibly can to acheive their long-term goals.
