1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Tems11 [23]
3 years ago
7

Consultants notified management of Goo Goo Baby Products that a crib toy poses a potential health hazard. Counsel indicates that

a product recall is probable and is estimated to cost the company $4.8 million. How will this affect the company's income statement and balance sheet this period?
Business
1 answer:
Vlad1618 [11]3 years ago
8 0

Answer:

Income statement will have an increased expense of $4.8 million and Revenue and cost of goods sold will decrease. In balance sheet the inventory will be decreased by the amount of crib toy inventory available.

Explanation:

Income Statement will show an expense of $4.8 million in this period as the cost of recall of inventory due to health hazard. Also sales and cost of goods sold will decrease by the amount of sales of crib toy in sales and by the amount of crib toys cost in cost of goods sold and will ultimately result in decrease in a gross profit of a company.

In the Balance Sheet the amount of Inventory will be decreased by the amount of crib toys available in stock.

You might be interested in
The balance sheet value of a firm's inventory is $60,000. Suppose that the firm purchases supplies at a cost of $3,500 and adds
Andreyy89

Answer:

$63,500

Explanation:

Calculatuon to determine the Final balance sheet value of inventory using the historical cost method

Using this formula

Final balance sheet value of inventory=Balance sheet value of firm's inventory+Supplies

Let plug in the formula

Final balance sheet value of inventory= $60,000+$3,500

Final balance sheet value of inventory= $63,500

Therefore Final balance sheet value of inventory is $63,500

3 0
3 years ago
Recently the corporate tax law in the U.S. changed so that firms that previously faced a marginal tax rate of close to 40% now p
garri49 [273]

Answer:

a.) increased the after-tax cost of debt

Explanation:

Missing options are:

a.) increased the after-tax cost of debt

b.) did not change the after-tax cost of debt

c.) increased the value of the deduction for interest expense

d.) decreased the after-tax cost of debt

The after tax cost of debt is calculated by multiplying the debt's principal x interest rate x (1 - tax rate). If the tax rate decreases, the after tax cost of debt increases. e.g.

$1,000 owed at 6%, when tax rate was 40% ⇒ after tax cost of debt = $1,000 x 6% x (1 - 40%) = $36 or 3.6%

now, $1,000 owed at 6%, when tax rate is 21% ⇒ after tax cost of debt = $1,000 x 6% x (1 - 21%) = $47.40 or 4.74%

4 0
3 years ago
At the end of the current year, $12,040 of fees have been earned but have not been billed to clients.
PSYCHO15rus [73]

Answer:

a.

Date                  Account Title                                          Debit                   Credit

XX-XX-XXX      Accounts Receivable                         $12,040

                         Fees earned                                                                    $12,040

b. No it would not have been.

If using the cash basis, the revenue would only be recognized when the cash is paid to the company. As the cash has not been paid, there would be no need to adjust for the revenue in the present period.

4 0
2 years ago
A good example of ___________________ is a real estate business that shares data on new home purchases between the unit that sel
Ghella [55]
<span>A good example of a market data approach is a real estate business that shares data on new home purchases between the unit that sells insurance for the home and the business unit that sold the home. A market data approach allows businesses to find and sell to consumers that fit the description of their products. They can read market data that is collected from one agency and use it to sell them their product as well because they are hand in hand products. </span>
5 0
3 years ago
You establish a straddle on Fincorp using September call and put options with a strike price of $80. The call premium is $7.00 a
Nina [5.8K]

Answer: $15.50

Explanation:

From the question, we are informed that someone establish a straddle on Fincorp using September call and put options with a strike price of $80 and that the call premium is $7.00 and the put premium is $8.50.

The most that can be lose on this position will be the addition of the call premium and the put premium. This will be:

= $7.00 + $8.50

= $15.50

6 0
3 years ago
Other questions:
  • Johnny Appleseed and Company ships all of the apples from its orchards in the Pacific Northwest to a single buyer in Japan. The
    10·1 answer
  • A postsecondary school that does not have a set of admission requirements such as a minimum GPA or test scores is called
    11·1 answer
  • Which of the following is true?Select one:a. Overhead costs are often affected by many issues and are frequently too complex to
    9·1 answer
  • I need help please ❤️
    11·1 answer
  • The term ________ refers to a factory that is guilty of some sort of labor abuse or violation, such as unsafe working conditions
    11·1 answer
  • Esperanza is starting a business by herself as an
    11·1 answer
  • Case Questions:
    14·2 answers
  • Allen is preparing a pie chart for the Empty Stocking Fund to show the proportionate low spending on administrative overhead as
    12·1 answer
  • What kind of warranty is often offered not through the manufacturer but instead through a third party? a. manufacturer’s warrant
    10·1 answer
  • The starch classification that consists of the percentage of people who remembered having previously seen the advertisement in t
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!