Answer:
a. Overstates Year 1 cost of goods sold.
b. Understates Year 1 net income
c. Understates Year 2 cost of goods sold
Explanation:
a. The formula for Calculating the Cost of Goods sold is;
<em>Cost of Goods Sold = Opening inventory + Purchases - Closing inventory.</em>
If the closing inventory is understated, it will reduced the amount being subtracted from Purchases and Opening inventory which would means that Cost of Goods sold will be overstated.
b. The Cost of goods sold is deducted from sales to give Gross profit. If Cost of goods is overstated, it will reduce Gross Profit higher than it should. A lower Gross Profit equates to a lower Net Income.
c. Going by the formula in <em>a;</em>
<em>Cost of Goods Sold = Opening inventory + Purchases - Closing inventory.</em>
In Year 2, the understated Year 1 closing stock will become the understated Year 2 Opening stock. With the opening stock understated, the Cost of goods will be understated as well because Opening stock is meant to increase Cost of goods sold as the formula shows. If it is understated, the amount that it will add will be understated as well.
Answer:
The correct answer to the following question is distributing the product intensively.
Explanation:
An item like gum which can be said to be lost cost item , should be distributed intensively , so that this product is always readily available to the consumers . For a product like this, people are not going put so much effort in to it ( like driving long way ), to buy this product which consumers often buy on the impulse. Consumers don't plan long ahead to buy a pack of gum , they just do it when they feel like they want to chew a gum , so its important that product like this should be intensively in the market.
The number of shares that a corporation's incorporation document allows it to sell is referred to as authorized shares.
<h3>What is a Corporation?</h3>
This refers to a business entity that has a group of members who acts together for a set goal.
Hence, we can see that when it comes to the selling of stocks by the corporation, there is a limit of shares to sell and this is known as authorized shares.
Read more about stocks here:
brainly.com/question/25572872
Answer:
The correct answer for option (a) is 7.17% and for option (b) is $48,546.69.
Explanation:
According to the scenario, the given data are as follows:
(a) Present value = $3,000
Future value = $6,000
Time period = 10 years
So, we can calculate the annual rate of return by using following formula:
Rate of return = (( FV ÷ PV)^1/t -1)
= (( $6,000 ÷ $3,000)^1/10 -1)
= (2)^0.1 - 1
= 1.07177346254 - 1
= .07177 or 7.17%
(b) Present value = $12,000
Rate of interest (r) = 15%
Time period = 10 year
So, we can calculate the Future value by using following formula:
FV = PV × ( 1+r)^t
= $12,000 × ( 1 + 15%)^10
= $12,000 × 4.04555773571
= $48,546.69
