Answer:
The amount of the impairment loss for this asset is <u>$110,000</u>
Explanation:
A assets is impaired when the fair market value of that assets lowers than the book value of the asset.
To calculate the impairment of an assets following formula is used
Impairent = Book value of Asset - fair market value of the asset
Placing values in the formula
Impairent = $700,000 - $590,000
Impairent = <u>$110,000</u>
Answer: Will report a liability of $5000 for judgement debt and a claim of $11,000
Explanation:
The liability refers to the obligations of the firm which are certain is going to make payment as compensation.
The $5000 liability, although payment has not been made it's already Incurred by the company under the acural concept.
The claim of $11,000 is only probable and not certain even though amount and time of execution can be estimated, since it's not certain it will only be recorded as a claim in the goverments fund balance sheet.
Answer:
Total Stockholders' Equity = $2,334,370
Explanation:
Note: See the attached excel file for the stockholders' equity section of the balance sheet for Finishing Touches as of December 31, 2018 with all the formulae used.
In the attached excel file, the retained earnings is calculated as follows:
Retained earnings = Net income – Common dividends - Preferred dividends = $149,000 - $94,000 - $1,330) = $53,670
From the attached excel file, we have:
Total Stockholders' Equity = $2,334,370
Answer: (i) $20 per model
(ii) $27 per model
(iii) Ginny has a comparative advantage in building models.
Explanation:
A country or a firm has a comparative advantage in producing a commodity if the opportunity cost of producing that commodity in terms of other commodities is lower than the other country or firm.
Opportunity cost is the benefit that is foregone for an individual by choosing one alternative over other alternatives available to him.
If the opportunity cost is lower for an individual then this will benefit him whereas if the opportunity cost is higher then this will not benefit the individuals.
Therefore,
Ginny's Opportunity cost of producing one model = 
= $20 per model
Eric’s opportunity cost of building models = $20 + 35% of $20
= $20 + $7
= $27 per model
Hence, Ginny has a comparative advantage in building models because Ginny's opportunity cost of building model is lower than Eric's opportunity cost.
