Answer:
The journal entries are as follows:
(a) On April 1, 2015
Notes receivable A/c Dr. $7,000
To Service revenue $7,000
(To record provide services to customer on account)
(b) On June 1, 2015
Notes receivable A/c Dr. $11,000
To Cash $11,000
(To record company lends to one of the vendors)
(c) On November 1, 2015
Notes receivable A/c Dr. $6,000
To Accounts Receivables $6,000
(To record accepts payment for prior services)
Complete Question:
Pribuss Engineering prepares its financial statements according to International Financial Reporting Standards. During 2018, the company incurred the following costs related to a new product design:
Research for New Design $2.4M
DVMPT of New Product $1.3M
Patent Filing Fees $52K
The development costs were incurred after technological and commercial feasibility was established and after the future economic benefits were deemed probable. The project was successfully completed and the new product was patented before the end of the 2018 fiscal year. What amount should Pribuss expense in its 2018 income statement related to the above expenditures?
Answer:
The Research expenses of $2.4M that are written as expense in the Income statement and the Development costs of $1.3M and patent legal fees of $53k are capitalized.
Explanation:
The reason is that the International Standard IAS 38 Intangible Assets says that the expenditure incurred on the research that hasn't entered development phase must be written as expense in the year and the expenditure incurred on the development phase of the research outcomes must be capitalized to the extent it is ready for use. In this case $1.3M is clearly a development cost and patent legal fees of $53k is the expenditure that will prepare the asset and making it ready for use, so it must also be capitalized.
The decrease in demand would be illustrated by a change from A to C.
<h3>What will be the change?</h3>
The demand curve is a downward sloping curve that shows the relationship between price and the quantity demanded. There is a negative relationship between price and quantity demanded.
A change in demand is caused by other factors other than the price of the good. Other factors include a change in income, a change in consumer taste or a change in the price of substitute goods.
When there is a change in demand, the demand curve would shift either to the right or to the left. When demand decreases, the demand curve would shift to the left. When demand increases, the demand curve would shift to the right.
Since, the demand for donuts have decreased, the demand curve would shift to the left. This would be a shift from A to C.
Please find attached the complete question. To learn more about the demand curve, please check: brainly.com/question/25140811
#SPJ1
Cross elasticity of demand measures the responsiveness in the quantity demand of one good when a change in price takes place in another commodity or good. It is calculated by dividing the percentage change in the quantity demanded of one good by the percentage change in price of other good.
Therefore, in this case, cross elasticity of demand will be;
17%/-2% = - 8.5 (-2% because its a decrease)
Thus , the elasticity will be -8.5
