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Scilla [17]
3 years ago
15

C Co. reported a retained earnings balance of $200,000 at December 31, 2010. In September 2011, C determined that insurance prem

iums of $30,000 for the three-year period beginning January 1, 2010, had been paid and fully expensed in 2010. C has a 30% income tax rate. What amount should C report as adjusted beginning retained earnings in its 2011 statement of retained earnings?
A. $220,000
B. $214,000
C. $221,000
D. $210,000
Business
1 answer:
timurjin [86]3 years ago
3 0

Answer:

B. $214,000

Explanation:

The insurance premium paid for a 3 year period should not have been expensed out rightly but recognized as expense through periodic amortization spread over the entire period.

As such, the amount that should have been expensed in 2011 for insurance premium is

= 1/3 × $30,000

= $10,000

Recognizing an expense of $10,000 rather than $30,000 would have resulted in an increase in the tax expense by

= 70% × ($30,000 - $10,000)

= $14,000

As such, the retained earnings would have been

= $200,000 + $14,000

= $214,000

The overstatement of an expense would have resulted in an understatement of net income and thus and understatement of the retained earnings.

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Researchers can manage and organize data by using strategies in research that will help them into organizing the information that they were able to obtain from the researches that they study. Strategies in which could help them in managing and organizing data are the following—communication, group meetings in which people who are involved with the study, extensive training, conceptual framework development and trails for external and internal audit in which should be created.

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3 years ago
While different natural resources and the theory of comparative advantage can explain many trade patterns, they cannot explain a
kakasveta [241]

Answer:

Intra-Industry Specialization

Dynamic Comparative Advantage

Product Life Cycle Theory

Explanation:

Ice wine is a special spirit that can only be made during a few months in the winter. The nations of Fruzenton and Grappovia are in different hemispheres, and each produces ice wine. During each nation’s winter, its ice wine industry produces enough to meet domestic demand and export to the other country. The ice wine exchanged between the two nations is nearly identical.  Intra-Industry Specialization

For many years, the nation of Stilettopia’s high-heel shoe producers have struggled in the international market because strict labor laws have made it hard to get productivity out of Stilettopians. In an effort to stimulate its industry, legislators in Stilettopia approve a bill that reduces the minimum wage and extends the number of hours shoe laborers can work in a day. Once the new policies take effect, Stilettopian high-heel shoe makers have lower costs than international competition and are able to reduce prices to the point that there is demand to export their shoes.  Dynamic Comparative Advantage

Since the turn of the century, nearly all X-ray machines purchased by hospitals have been made in Alloway. However, engineers in Osteoville recently designed an X-Ray machine that produces much more accurate results, leading to fewer malpractice cases and more reliable diagnoses. These new X-ray machines quickly become the industry standard. As a result of this, the production of X-ray machines is thriving in Osteoville, while firms in Alloway lose market share and begin trying to develop a new source of advantage Product Life Cycle Theory

7 0
3 years ago
What is the importance of Business Development Services?​
antiseptic1488 [7]

Answer:

Business development services are important because they can assist entrepreneurs to run their business more effectively and, if appropriately applied, can act as an enhancer of access to finance and as an alternative form of “collateral” in circumstances where tangible collateral may be an impediment to meeting .

5 0
3 years ago
Period costs a.are used to compute product cost. b.are selling costs and administrative costs. c.are carried in inventory until
iren [92.7K]

Answer:

b. are selling costs and administrative costs.

Explanation:

A period cost consists of cost that do not fall under the category of fixed assets, payments in advance, or inventory. It is not that related to transactional event but highly related to the passage of time. A period cost is therefore recorded in the income statement as part of the selling and administrative expenses.

Some of the examples of period costs are utilities, rent, office supplies, stationery, depreciation of office equipment and others which are categorized as selling costs and administrative expenses.

7 0
3 years ago
Ambrin Corp. expects to receive $2,000 per year for 10 years and $3,500 per year for the next 10 years. What is the present valu
sineoko [7]

Answer:

A. $19,034

Explanation:

The computation of the present value for 20 years cash flow is shown below:

For the First 10 years

Given that

Payment for first 10 years = $2,000

Discount rate = 11%

Now the present value is

= $2000 ÷ 1.11 + $2,000 ÷ 1.11^2 +...........+ $2,000 ÷1.11^10

= 11,778.46402 ..............(1)

For the Next 10 years

Given that

Payment for next 10 years = 3,500

Discount rate = 11%

Now the present value is

= $3,500 ÷ 1.11 + $3,500 ÷ 1.11^2 +...........+ $3,500 ÷ 1.11^10

= 20,612.312

So, today present value is

= $20,612.312 ÷ 1.1110

= 7,259.339 ...........................(2)

Now

Total present value is

= $7,259.339 + $11,778.46402

= $19,034

3 0
3 years ago
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