Answer:
The correct answer is C.
Explanation:
Supposing that more is preferred to less, Maria would never choose a point where she's below her budget line. That is, Maria will spend all of her rent.
Therefore we can already discard possibilities like:
- A. Because
⇒ $33<$36
The individual is not maximizing utility is she were to choose this bundle.
- B. Because
⇒ $42>$36
This bundle is beyond what Maria can afford.
Further, assuming that Maria has convex preferences, she'll choose a point where she buys more of both goods rather than specializing in the consumption of one of them. That leaves bundle D aside over bundle C because even though both bundles satisfy her budget condition M=$36, bundle C provides more utility to Maria than bundle D for being located in a more centric solution along her budget line.
Interest is capitalized when incurred in connection with the construction of plant assets because, during construction, the asset is not generating revenue
<h3>What is Interest?</h3>
This refers to the amount or rate that is added to a principal amount and this is usually done when a loan is collected.
Hence, we can see that when plant assets are being constructed, interest is capitalized and the main reason why this happens is that the asset is not generating revenue.
Furthermore, actual interest is the only thing that should be capitalized and this is because, during construction, the asset is not generating revenue and therefore companies should defer (capitalize) interest cost.
Thus, Interest is capitalized when incurred in connection with the construction of plant assets because, during construction, the asset is not generating revenue.
Read more about interest capitalization here:
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Answer:
1.28 times
Explanation:
How many times as large the revenue generated in 2017 is compared to that of 2016 can be derived from the division of the revenues for both years.
Given that the total revenue for 2017 is $175,200 and that for 2016 is $136,900
The number of times 2017 revenue is as large as that of 2016
= $175,200/$136,900
= 1.28 times
Answer:
the inventory be reported at on the December 31 balance sheet is $828,000
Explanation:
Here the inventory should be recorded at lower of cost or net realizable value
Since the cost per unit is $46
And, the net realizable value is $48
So, the lowest cost per unit is $46
Now the ending inventory reported is
= 18,000 units × $46 per unit
= $828,000
hence, the inventory be reported at on the December 31 balance sheet is $828,000
Answer:
Huprey Co.
Identifying the accounting treatment for each claim as either (a) a liability that is recorded or (b) an item described in notes to its financial statements:
1. Huprey (defendant) estimates that a pending lawsuit could result in damages of $1,550,000; it is unlikely that the plaintiff will win the case.a. A liability that is recorded.
b. An item described in notes to its financial statements.
2. Huprey faces a loss on a pending lawsuit that it is unlikely to lose; the amount is reasonably estimable.
a. An item described in notes to its financial statements. b. A liability that is recorded.
3. Huprey faces a probable loss on a pending lawsuit; the amount is reasonably estimable.a. An item described in notes to its financial statements.
b. A liability that is recorded.
Explanation:
Huprey Co. will recognize and record contingent liabilities in its accounts when it can be reasonably established that the future event will occur and the amount of the liability can be reasonably estimated. The implication is that Huprey Co. must establish two things before a contingent liability is recognized and recorded. One is that the probability or the likelihood or the chance that the event will happen exists and can be estimated. With the probability estimate, it becomes possible for Huprey Co. to also estimate the amount that the happening of the event will cost it.
