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DIA [1.3K]
2 years ago
6

On May 18, Rodriguez Co. issued an $84,000, 6%, 120-day note payable on an overdue account payable to Wilson Company. Assume tha

t the fiscal year of Rodriguez ends on June 30. Which of the following relationships is true?a. Rodriguez is the creditor and credits Accounts Receivable
b. Wilson is the creditor and debits Accounts Receivable
c. Rodriguez is the borrower and debits Accounts Payable
d. Wilson is the borrower and credits Accounts Payable
Business
1 answer:
ankoles [38]2 years ago
7 0

Answer:

c. Rodriguez is the borrower and debits Accounts Payable

Explanation:

Rodriguez Co will :

  1. De-recognise the Trade Payable - Wilson Company
  2. Recognise a Financial Liability to Wilson Company

Wilson Company will :

  1. Recognise an Investment or FA in Rodriguez Co
  2. De-recognise the Trade Receivable - Wilson Company
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11 months ago
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egoroff_w [7]

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3 0
1 year ago
Which of the following statements describes how to conduct a horizontal analysis?
Veseljchak [2.6K]

Compare amounts from a recent year to a base year and identify growth trends.

Explanation:

Horizontal analysis (also defined as pattern analysis) is a method for the study of financial reporting that indicates improvements in the sums of the respective financial statements over a span of time. This is a valuable method for determining patterns. Statements over two or more cycles shall be required over lateral study.

In a horizontal analysis, you equate transactions with one another over time periods — in eg, accounts receivable (A / R) in 2014 and A / R in 2015.

To conduct a vertical report, pick an investment account (comparable to gross revenue) and add all balance sheet funds as a ratio.

7 0
2 years ago
Navy Corporation has E&amp;P of $240,000. It distributes land with a fair market value of $70,000 (adjusted basis of $25,000) to
anastassius [24]

Answer:

a. A taxable dividend of $15,000

Explanation:

The relevant variables are the friar market value and the tax liability on the land.

The fair market value is the amount at which an asset or a company will be exchanged between a knowledgeable willing seller and a knowledgeable willing seller in an ordinary transaction in the market. Put simply, the fair market value of an asset gives an estimation of the price that a buyer would pay to the owner of the asset if the owner decides to sell the asset.

When a company distributes an asset as a dividend to the owner, any liability taken over on the assets will be deducted from the fair market value of the asset to arrive at the taxable dividend.

From the question, the $55,000 tax liability assumed by Troy will be deducted from the fair market value of the asset to obtained the taxable dividend as follows:

Taxable dividend = Fair market value - Tax liability on the land

                             = $70,000 - $55,000

                             = $15,000

Therefore, the taxable dividend is $15,000.

3 0
2 years ago
Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the nec
Vlad [161]

Complete question:

Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $35 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally:Per Unit 15,000 Units per YearDirect materials $14 $210,000Direct labor 10 150,000Variable manufacturing overhead 3 45,000Fixed manufacturing overhead, traceable 6* 90,000Fixed manufacturing overhead, allocated 9 135,000Total cost $42 $630,000--------------------------------------------------------------------------------*One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value).Requirement 1:(a) What will be the total relevant cost of 15,000 units, if they are manufactured internally? (Omit the "$" sign in your response.)Total relevant cost $ ?Requirement 2:Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the freed capacity to launch a new product. The segment margin of the new product would be $150,000 per year.(a) What will be the total relevant cost of 15,000 units, if they are manufactured internally? (Omit the "$" sign in your response.)Total relevant cost $ ?

Answer:

If they want to buy from the company in the first scenario, total cost will be: 15,000 x 35 = 525,000

So, in this case it would be preferable if they produce their carburetors internally

B) In this case,it would be better and cheaper to is better to buy the carburetors. Since it has a 525,000 cost but 150,000 contribution margin in the new product

Explanation:

A) If they keep producing internally, the total cost would be: The relevant cost would be:

Direct Materials =  14

Direct labor     =10

Variable Overhead = 3

traceable fixed overhead  =6

Total    =33

15000 * 33 = $495,000

If they want to buy from the company in the first scenario, total cost will be: 15,000 x 35 = 525,000

So, in this case it would be preferable if they produce their carburetors internally.

B) Total production cost: 495,000

If they want to buy from the company, total cost will be: 525,000 - 150,000 = 375,000

In this case,it would be better and cheaper to is better to buy the carburetors. Since it has a 525,000 cost but 150,000 contribution margin in the new product

4 0
2 years ago
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