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Korolek [52]
2 years ago
10

Sheffield Company has $145,000 of inventory at the beginning of the year and $131,000 at the end of the year. Sales revenue is $

1,972,800, cost of goods sold is $1,145,400, and net income is $248,400 for the year. The inventory turnover ratio is:
Business
1 answer:
notka56 [123]2 years ago
7 0

Answer:

Sheffield Company

Inventory Turnover Ratio = Cost of goods sold/Average Inventory

= $1,145,400/$138,000

= 8.3 times

Explanation:

a) Data and Calculations:

Beginning inventory = $145,000

Ending inventory = $131,000

Average inventory = (Beginning inventory + Ending inventory)/2

= ($145,000 + 131,000)/2

= $138,000

Sales revenue = $1,972,800

Cost of goods sold = $1,145,400

Net income = $248,400

b) The inventory turnover ratio for Sheffield Company  is an efficiency ratio that shows how inventory is managed and the number of times Sheffield sells or consumes the inventory during an accounting period.   This is why Sheffield Company takes the average of the inventories in order to smoothen seasonal fluctuations in the inventory level during the year.  When this ratio divides the number of days in the accounting period, Sheffield will get the days it takes for inventory to be purchased or produced, and then sold or consumed.

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deff fn [24]

Question Continuation

Prepare the following journal entries for Revis:

1. The journal entry on January 31 to record the first month of revenue under the contract.

2. Assuming total cost savings exceed target, the journal entry on June 30 to record receipt of the bonus.

3. Assuming total cost savings fall short of target, the journal entry on June 30 to record payment of the penalty.

Answer:

1. The journal entry on January 31 to record the first month of revenue under the contract.

Possible Price -------------------------------Possibility------------Expected Amount

$130,000 ($20,000*6+$10,000) ------80% ------- --------------$104,000 (80% * $130,000)

$110,000 ($20,000*6-$10,000) --------20% -----------------------$22,000 (20% * $110,000)

Expected value--------------------------------------------------------------$126,000 ($104,000 + $22,000)

Accounts ------------------------Debit------------Credit

Cash -------------------------------$20,000 (Debit)

Bonus receivable----------------$1,000 (Debit)

Service revenue --------------------------------- $21,000 ($126,000/6)(Credit)

2. If total cost savings exceed target, record the entry on June 30 for receipt of the bonus

Accounts --------------Debit--------------------------Credit

Cash --------------------- $10,000 (Debit)

Bonus receivable-------------------------------------$6,000 (Credit) ($1000 * 6)

Service revenue ------------------------------------- $4,000 (Credit)

3. If total cost savings fall short of target and record the entry on June 30 for payment of the penalty.

Accounts --------------Debit--------------------------Credit

Service Revenue ---------------- $16,000 (Debit)

Bonus receivable-------------------------------------$6,000 (Credit) ($126,000 / 6)

Cash ------------------------------------- $4,000 (Credit)

3 0
3 years ago
When a firm's customers make investments in order to use its particular product or service, the customers incur which type of co
vladimir1956 [14]

When a firm's customers make investments in order to use its particular product or service, the customers incur switching costs if they purchase another firm's products or services instead. Therefore, the option B holds true.

<h3>What is the significance of switching costs?</h3>

The switching costs can be referred to or considered as the costs incurred by the customers of a product or a service when they use the alternatives or the competitive products available in the market, instead of the product they were using earlier.

Therefore, the option B holds true and states regarding the significance of the switching costs.

Learn more about switching costs here:

brainly.com/question/14728758

#SPJ1

When a firm's customers make investments in order to use its particular product or service, the customers incur which type of costs if they purchase another firm's products or services instead?

A. Acquisition costs

B. Switching costs

C. Alternative costs

D. Replacement costs

4 0
1 year ago
During the year, Octagon produced 8,000 units, used 24,000 direct labor hours, and incurred variable overhead of $120,000. Budge
Natali5045456 [20]

Answer:

Manufacturing overhead rate(spending) variance= $24,000 favorable

Explanation:

Giving the following information:

Actual direct labor hours= 24,000

Octagon produced 8,000 units and incurred a variable overhead of $120,000.

The hours allowed per unit are 2. The standard variable overhead rate is $3.00 per direct labor hour.

To calculate the variable overhead spending variance, we need to use the following formula:

Manufacturing overhead rate(spending) variance= (standard rate - actual rate)* actual quantity

Actual rate= 120,000/24,000= 5

Manufacturing overhead rate variance=  (6 - 5)*24,000

Manufacturing overhead rate variance= $24,000 favorable

7 0
3 years ago
Jamie Lee has decided to purchase a certified pre-owned vehicle. What might she expect as far as reliability and a warranty on t
babunello [35]

The things which Jamie Lee <em>might expect</em> as far as reliability and a warranty on the used car is:

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  • Low mileage
  • Accident free, etc.

<h3>What is a certified pre-owned vehicle?</h3>

This refers to a fairly used car which has been certified by factory standards that has been accident free and has very low mileage and is expected to work without much problems.

With this in mind, we can see that because Jamie Lee has decided to purchase a pre-owned vehicle, the things which she would expect in terms of reliability and warranty is that it should give her little to no problems

Read more about pre-owned vehicle here:
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6 0
2 years ago
Lithium, Inc. is considering two mutually exclusive projecLithium, Inc. is considering two mutually exclusive projects, A and B.
just olya [345]

Answer:

  • The modified internal rate of return for PROJECT A:

b. 24.18%

  • The internal rate of return for Project B :

b. 35.27%.

Explanation:

The mean difference between the MIRR and the IRR it's that the IRR assumes that the obtained positive cash flows are reinvested at the same rate at which they were generated, while the MIRR considers that these cashflow will be reinvested at the external rate of return, this case 10%.

Project A  Y1             Y2

-$95,000  $65,000   $75,000  

24,18% MIRR  

Project B  -$120,000  

Y 1             $64,000  

Y 2            $67,000  

Y 3            $56,000  

Y 4            $45,000  

TIR 35,27%

4 0
2 years ago
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