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inna [77]
3 years ago
12

LaRoe Lawns’ inventory increased during the year by $6.7 million. Its accounts payable increased by $6.6 million during the same

period. a. What is the amount of cash LaRoe paid to suppliers of merchandise during the reporting period if its cost of goods sold was $44 million? b. Prepare a summary entry that represents the net effect of merchandise purchases during the reporting period.
Business
1 answer:
kozerog [31]3 years ago
4 0

Answer:

a. Cash paid to suppliers of merchandise during the reporting period: $44.1 million

b. A summary entry that represents the net effect of merchandise purchases during the reporting period as below:

Dr Cost of goods sold                  44,000,000

Dr Inventory                                   6,700,000

Cr Account Payable                      6,600,00

Cr Cash                                          44,100,000

Explanation:

We have the total amount goods buying from the supplier in the period = Cost of good sold in the period + Difference in the inventory balance of the period = $44 million + $6.7 million = $50.7 million

Thus, the additional amount owed supplier in the period is $50.7 million.

Account Payable increased by 6.6 million, it means that only 44.1 million ( that is, 50.7 million - 6.6 million) is paid during the period.

Thus, the summary will represents: Increase in COGS 44 million ( given); Increase in Inventory 6.7 million (given); Increase in account payable 6.6 million ( given) and Decrease in Cash 44.1 million ( calculated above).

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6 0
3 years ago
The processes a firm uses to turn inputs into outputs of goods and services is called
Troyanec [42]

The correct answer is technology.

The processes that a firm uses in order to turn inputs into outputs of goods and services is called technology.

6 0
3 years ago
An application of the Law of Supply is,
tino4ka555 [31]

Answer:The law of supply says that a higher price will induce producers to supply a higher quantity to the market. Supply in a market can be depicted as an upward sloping supply curve that shows how the quantity supplied will respond to various prices over a period of time.

Explanation:

3 0
3 years ago
The market value of​ Fords' equity, preferred​ stock, and debt are $ 7 ​billion, $ 2 ​billion, and $ 13 ​billion, respectively.
steposvetlana [31]

Answer:

WACC is 9%

Explanation:

WACC is the average cost of capital of the firm based on the weightage of the debt and weightage of the equity multiplied to their respective costs.

According to WACC formula

WACC = ( Cost of equity x Weightage of equity ) + ( Cost of debt ( 1- t) x Weightage of debt ) + ( Cost of Preferred equity x Weightage of Preferred equity )

As per given data

Market Values

Equity = $7 ​billion,

Preferred​ stock = $2 ​billion

Debt = $13 ​billion

Cost

Equity

Capital asset pricing model measure the expected return on an asset or investment. it is considered as the cost of common stock.

Formula for CAPM

Cost of Equity = Risk free rate + beta ( market return - risk free rate )

Cost of Equity = Rf + β ( Mrp )

Cost of Equity = 3% + 1.6 ( 8% ) = 15.8%

Preferred​ stock = $2 / $26 = 0.077 = 7.7%

Debt = 8%

Placing values in the formula

WACC = ( 15.8% x $7 billion / $22 billion ) + ( 8% ( 1- 0.3) x $13 billion / $22 billion ) + ( 7.7% x $2 billion / $22 billion )

WACC = 5.03% + 3.31% + 0.7% = 9.04%

7 0
3 years ago
on october 1, the beginning of the new term, Davis institite, a private school, recieves $168,500 in tuition for the upcoming se
Aneli [31]

The correct answer is $126,375.

If the term is four months long and Davis institute receives $168,500 in tuition for the four months then they receive $42.125 per month. You can calculate this by dividing $168,500 by 4, which equals $42,125. Three of the months are in the first fiscal year, so 3 months worth of revenue will be allocated to that year. $42,125 x 3 = $126,375.

8 0
3 years ago
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