Answer:
The journal entry is shown below:
Explanation:
The journal entry for the following will be as:
Accounts Payable A/c.......................Dr $4,000
Merchandise Inventory A/c..........Cr $80
Cash A/c..............................................Cr $3,920
As the buyer purchases merchandise worth $4,000, so the accounts payable account is debited and the buyer will be applied a discount of 2%, so merchandise inventory is credited and against the cash is paid, so the cash account is credited.
Working Note:
Discount = Amount × 2%
= $4,000 × 2%
= $80
Absolute advantage is beyond the firm's capabilities to produce domestically, but could be achieved by trading with another country.
<h3>What is Absolute advantage?</h3>
Adam Smith, an economist from the 18th century, introduced the idea of absolute advantage in his book The Wealth of Nations to explain how nations might profit from trade by specializing in producing and exporting the things that they can manufacture more successfully than other nations.
International trade is the trade where countries import and export the goods to the other countries so that all the countries have some resources.
Thus, it is absolute advantage.
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Answer:
$2,317,000
Explanation:
The computation of the weighted-average accumulated expenditures for interest capitalization purposes is shown below:
For expenditure on March 1
= $1,932,000 × 10 months ÷ 12 months
= $1,610,000
On June 1
= $1,212,000 × 7 months ÷ 12 months
= $707,000
On December 31, it would be zero
So, the accumulated expenditures is
= $1,610,000 + $707,000
= $2,317,000
