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zysi [14]
3 years ago
13

Assume that no correcting entries were made at December 31, 2020. Ignoring income taxes, by how much will retained earnings at D

ecember 31, 2021 be overstated or understated?
a. $ 2,000 understated
b. $15,000 overstated
c. $15,000 understated
d. $18,000 understated
Business
1 answer:
sesenic [268]3 years ago
6 0

Answer; a. $ 2,000 understated

Explanation;

Inventory is usually self correcting so the overstatement in 2020 will not affect 2021. Only relevant effects will be the Depreciation in both years and inventory in 2021.

The Depreciation overstatement of $12,000 in 2020 had the effect of reducing Net income as it increased expenses so retained earnings will be understated.

In 2021, an understatement of Depreciation will overstate income as it understates expenses. The overstatement of Ending Inventory will lead to an understatement of Cost of Goods sold which will overstate Income as well.

2020 = $12,000 understatement

2021 = 6,000 + 4,000 = $10,000 overstatement

= 12,000 - 10,000

= $2,000 understatement

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Critics argue that the BCG portfolio model sometimes provides misleading advice concerning how resources should be allocated acr
Gnoma [55]

Answer:

Limitation of the BCG model include;

• Market share and industry growth are not the only factors of profitability.

• Business can only be classified to four quadrants.

• It does not define what ‘market’ is.

• Does not include other external factors that may change the situation completely.

Explanation:

Necessary steps managers should take to overcome the limitations;

• BCG matrix can be used to analyze SBUs, separate brands, products or a firm as a unit itself. Which unit will be chosen will have an impact on the whole analysis.

• It is important to clearly define the market to better understand firm’s portfolio position.

7 0
3 years ago
For tax reasons, your client wishes to purchase an annuity that pays $80,000 each year for 6 years, with the first payment in on
tatyana61 [14]

Answer:

$369,830.37

Explanation:

Present value can be calculated using a financial calculator

Cash flow from year  1 to 6 = 80,000

i = 8%

pv = $369,830.37

To find the PV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

5 0
3 years ago
DoorWay Computers, Inc., the trademark owner of "DoorWay," sought a court injunction to prevent Handyman Hardware, Inc. from usi
amid [387]

Answer:

False  

Explanation:

Because the injunction is the legal remedy that the special court's judge orders not the jury. The order enforce a party to do what must be done or refrains it from doing specific acts that harms the other party. So saying that Doorway sought the court injunction in which the jury decides the right course of action is incorrect because injunction is the warning of judge not of jury.

3 0
4 years ago
On January 1, 2017, Dagwood Company purchased at par 6% bonds having a maturity value of $300,000. They are dated January 1, 201
statuscvo [17]

Answer:

Dagwood bonds receivables   300,000 debit

                             Cash                              300,000 credit

--to record purchase of bonds--

Interest receivables                     18,000 debit

           Interest revenue                               18,000 credit

--to record accrued interest on dagwood bonds--

Cash                                              18,000 debit

         Interest receivables                            18,000 credit

--to record collection of interest--

Explanation:

as the bonds are purchased at par we pay for the same as the face value

interest for the year

principal x rate

300,000 x 6% = 18,000

at December 31th the interest are receivables as we didn't collect the cash yet

Then, on january first, we receive the cash and write-off the receivables

4 0
4 years ago
What was the domestic system?
Nonamiya [84]
The best answer to the question 'What was the domestic system?' would be letter c. <span>The domestic system allowed control of land, labor and capital by individual persons. This is also called a putting-out system and led to unemployment when it was early practiced.</span>
8 0
4 years ago
Read 2 more answers
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