Answer:Skysong journal $
Date
December 2020
Raw material Dr 984,100
Loss on raw material 48,000
Supplier Cr 1,032,100
Narration. recognition of raw materials purchased at agreed value.
2021
Supplier Dr. 1,032,100
Bank Cr. 1,032,100
Narration. Payment for raw materials purchased at agreed value.
Explanation:
The raw materials needs to be paid for at the agreed value not withstand ing the fall in value. However stock are to be recognized at cost or net realisable value which ever is less and since the market value of the stock has dropped this has to be recognized as a loss in the income statement to avoid the stock been over value.
Answer: The value of the bond will decrease
Explanation:
The Interest rate has a negative inverse relationship with the value of a bond
. When the interest rate increases the value of a bond decreases and when interest rate decreases the bond value increases. Bonds with low coupon rates tend to be more sensitive to interest rate changes this is known has coupon effect.
Bonds with long time frame (long term bonds), they also tend to be are more sensitive to changes in the interest rate this is known has the maturity effect. Therefore a change in the interest rate will cause a huge change in the value of a Bond with low coupon rate and long time period.
The Bond is a 20 year Bonds which qualifies it to be a long term bond and the coupon Rate is 7%, with these facts and knowing that long term bonds are more sensitive to interest rate changes we can conclude that the sudden increase of the interest rate to 15% will cause a huge decrease in the value of the bond
Answer:
Correct answer is:
Debit Salaries Expense $840
Credit Salaries Payable $840
Explanation:
2 employees each paid at $ 210 per day so daily salary expense is $210*2 = $420.
The accounting period ends on Tuesday and both employees work for Monday and Tuesday so the 2 days salaries expense is $420*2= $840.
As the salaries are paid on every Friday so there is a liability on a company for the 2 days salary payable to be recorded on accounting period close date i.e Tuesday.
Answer:
ABC's retained earnings balance at the end of April is $11,400
Explanation:
The addition to retained earnings in the current month is revenue derived from providing services to customers minus the expenses such as rent and employee salaries
Net income for the month=$2,000+$900-$800-$700=$1400
Retained earnings at month end=opening retained earnings+net income
Retained earnings at month end=$10,000+$1,400=$11,400
Answer:
1.23
Explanation:
Inventory turnover is a ratio showing how many times a company has sold and replaced inventory during a given period.
Cost of Sales=Opening Inventory+Purchases-Closing Inventory
=5,500+4,000-3,800= 5,700
Average Inventory= Opening + Closing/2
= 5,500+3,800/2= 4,650
Inventory Turnover Ratio= <u>Cost of Sales</u>
Avg Inventory
= 5,700/4,650=1.23
