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Murljashka [212]
3 years ago
9

During a period of rising prices, using fifo (first-in, first-out) inventory valuation method will result in ________ net income

figures than would lifo (last-in, first-out). higher lower the same less accurate
Business
1 answer:
dlinn [17]3 years ago
7 0
The correct option is "higher".

<span>During a period of rising prices, FIFO provides the higher net income figures and during the period of falling prices, LIFO provides the higher net income figures.
FIFO stands for first in, first out.
LIFO stands for last in, first out.</span>
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The stockholders' equity of Verrecchia Company at December 31, 2013, follows:
liq [111]

Answer:

Verrecchia Company

Financial Statement effects:

1. Jan. 5 Issued 10,000 shares of common stock for $12 cash per share:

Assets (Cash) would increase by $120,000

Equity (Common Stock) would increase by $120,000

2. Jan. 18 Repurchased 4,000 shares of common stock at $15 cash per share.

Assets (Cash) would decrease by $60,000

Equity (Common Stock) would decrease by $60,000

3. Mar. 12 Sold one-fourth of the treasury shares acquired January 18 for $18 cash per share.

Assets (Cash) would increase by $18,000

Equity (Common Stock) would increase by $18,000

4. July 17 Sold 500 shares of the remaining treasury stock for $13 cash per share.

Assets (Cash) would increase by $6,500

Equity (Common Stock) would increase by $6,500

5. Oct. 1 Issued 5,000 shares of 8%, $25 par value preferred stock for $35 cash per share.

Assets (Cash) would increase by $175,000

Equity (Preferred Stock) would increase by $125,000

Equity (Additional Paid-in Capital - Preferred) would increase by $50,000

Explanation:

The Financial Statement effects of each transaction is a reflection of how each transaction affects at least two opposite elements of the financial statement.  Every transaction affects the elements of the financial statement in one way or another, which enables the accounting equation to remain in balance.

For example, a transaction may increase the assets and also increase either the liabilities or equity side of the balance sheet.

In our example, the transactions affected only the balance sheet.  This means that each transaction increases or decreases the assets, liabilities, or equity sections.

5 0
3 years ago
Suppose your firm receives a million order on the last day of the year. You fill the order with million worth of inventory. The
s344n2d4d5 [400]

Answer:

a. Revenues - These will increase by $5 million to represent the entire value of the order.

b. Earnings. - Increase by $3 million

Earnings in this case are revenue less the cost of inventory which will be;

= 5 - 2

= $3 million

c. Receivables - Increase by $4 million

The customer paid $1 million upfront which means that they still owe $4 million out of the $5 million. This will go to the receivables account to show that the customer owes the business.

5 0
3 years ago
Joel operates his business, carson collectibles, by himself. he has made no election with his state regarding his business. what
Paha777 [63]
<span>Joe's business is most likely a type of sole proprietorship. Sole proprietorships are usually ran by one person who accounts for all of the business expenses as part of their personal taxes so there is no difference between personal and business. This form of business also does not need to file any paperwork with the state. The owner just needs a business license.</span>
3 0
3 years ago
As an investor you have a required rate of return of 12 percent for investments in risky stocks. You have analyzed three risky f
Darina [25.2K]

Answer:

Explanation:

Expected annual growth rate in dividends 7%

Dividend growth Model= Pv=Do(1+g)/Ke-g

present value = 1(1+7%) / 12%-7%

present value =1.07 /5%

present value =21.4

Expected annual growth rate in dividends 2%

Dividend growth Model= Pv=Do(1+g)/Ke-g

present value = 1(1+2%) / 12%-2%

present value =1.02 /10%

present value =20.4

Expected annual growth rate in dividends -1%

Dividend growth Model= Pv=Do(1+g)/Ke-g

present value = 1(1+(-1)%) / 12%-2%

present value =0.99/10%

present value =7.69

5 0
3 years ago
Industries’ capital structure features 63 percent equity, 7 percent preferred stock, and 30 percent debt. If the before-tax comp
djyliett [7]

Answer:

16.091%

Explanation:

The computation of the WACC is shown below:

= (Weightage of debt × cost of debt) × ( 1- tax rate) + (Weightage of preferred stock) × (cost of preferred stock) + (Weightage of  common stock) × (cost of common stock)

= (0.3 × 9%) × ( 1 - 21%) +  (0.07 × 9.5%) +  (0.63 × 11.60%)

= 2.133% + 6.65% + 7.308%

= 16.091%

Basically we multiplied the weightage with its cost

5 0
3 years ago
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