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3 years ago

Past costs that are not affected by new decisions are known as

Business

2 answers:

Evgen [1.6K]3 years ago

5 0

The answer is sunk cost .

<h2>Further explanation </h2>

Sunk costs are costs that are incurred and are not refundable. Before the issue, sunk costs are included in the opportunity costs section and are not relevant for future decision making. This term originates from the oil industry where the decision to stop or continue operating an oil well is made based on expected cash flow and not based on a lot of money spent on drilling it. This is usually referred to as embedded costs, previous year's costs, stranded costs, or sunk costs.

According to the dictionary, the sunk costs are costs incurred in the past that will not be affected by current decision making. In the accounting world, sunk costs are defined as costs that have been incurred and generally cannot be changed.

Sunk costs are related to fixed costs so to calculate sunk costs you can use the fixed cost formula, which is as follows:

<u>Fixed costs = sunk costs + fixed costs that can be avoided </u>

If seen from the formulation of fixed costs consisting of sunk costs and fixed costs that can be avoided. Fixed costs that can be avoided are fixed costs components that can be avoided, but sunk costs are components of fixed costs that cannot be avoided.

Learn more

Sunk cost brainly.com/question/7034592, brainly.com/question/13777436

Details

Class: High School

Subject: Business

Keywords: Past costs are not affected by new decisions.

salantis [7]3 years ago

4 0

<span>Past costs that are not affected by new decisions are known as sunk costs. Sunk costs do not need to be taken into account when making new decisions because the money associated with it was already lost and it can not be regained. This money is lost by businesses due to bad decisions, such as poor investments.</span>

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a. The loss on the cash sale of equipment was $5,125 (details in b). b. Sold equipment costing $46,875, with accumulated depreci

alexgriva [62]

The completed question is

Statement of cash flows Forten Company, a merchandiser, recently completed its calendar-year 2019 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's balance sheets follow. 2019 2018 Assets Cash $ 49,800 $ 73,500 Accounts receivable 65,810 50,625 Inventory 275,656 251,800 Prepaid expenses 1.250 1.875 Total current assets 392,516 377.800 Equipment 157,500 108,000 Accum. depreciation Equipment (36.625) (46,000 Total assets $513.391 $439,800 Liabilities and Equity Accounts payable S53,141 $114.675 Short-term notes payable 10.000 6.000 Total current liabilities 63,141 120,675 Long-term notes payable 65.000 48.750 Total liabilities 128,141 169,425 Equity Common stock, $5 par value 162.750 150,250 Paid-in capital in excess of par, common stock 0 Retained earnings 185.000 120.125 Total liabilities and equity $513.391 $439.800 Additional Information on Year 2019 Transactions a. The loss on the cash sale of equipment was $5,125 (details in b). b. Sold equipment costing $46,875, with accumulated depreciation of $30,125, for $11,625 cash. c. Purchased equipment costing $96,375 by paying $30,000 cash and signing a long-term note payable for the balance. d. Borrowed $4,000 cash by signing a short-term note payable. e. Paid $50,125 cash to reduce the long-term notes payable. f. Issued 2,500 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $50,100. h. Depreciation expense was $ 20,750. i. Net income was $114,975. Required Prepare a complete statement of cash flows; report its operating activities using the indirect method. Disclose any noncash investing and financing activities in a note.

Explanation:

Statement of cash flow

Cash flows from operating activities

net income 114,975

Adjustments to reconcile net income to net

cash provided by operations:

Depreciation expense 20,750

loss on sale of Equipment 5,125

increase in account receivable -15185

increase in inventory -23856

Decrease in prepaid expense 625

Decrease in accounts payable -61534

net cash provided by operating activities 40,900

Cash from investing activities

cash from sale of Equipment 11,625

cash for purchase of Equipment -30000

Cash used fro investing activities -18,375

Cash from financing activities

Cash from short term notes payable 4,000

Cash paid for long term notes payable -50,125

Cash from stock issue 50000

paid cash dividend -50,100

Cash used for financing activity -46,225

Net decrease in cash -23,700

Cash at the beginning og the year 73500

Cash at year end 49,800

non cash financing and investing activity

purchase of equipment financed by long term notes payable 66375

4 0

3 years ago

A landowner owned a large piece of property containing an inn and a bakery. She entered into a contract to sell the property to

pickupchik [31]

Answer:

The most likely result at trial is that the landowner's claim for specific performance will be successful, and she will be awarded the entire price of contract.

Explanation:

When there isn't a statute, the buyer bears the risk of loss when property subject to a contract for sale is destroyed without fault of any party prior to the date specified for closing. Unless the contract specifies otherwise, the buyer must pay the contract price even if the property is damaged by fire.

The inn was burned down in this case after the landowner and the buyer signed a contract for the sale of the property, but before the closing date. The contract appears to be silent on the risk of loss, and no appropriate statute exists. As a result of the common law rule, the buyer bears the risk of loss. Therefore, the landowner has the right to particular execution of the contract, which implies that the entire stipulated contract price must be paid by the buyer.

Regardless of the property's drop in worth owing to the fire, the $1 million contract price must be paid by the buyer because he bears the risk of loss.

Therefore, the most likely result at trial is that the landowner's claim for specific performance will be successful, and she will be awarded the entire price of contract.

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2 years ago

Accounting Equation Shannon Cook is the stockholder and operator of Personality Shine LLC, a motivational consulting business. A

Neporo4naja [7]

Answer:

a. Stockholders' equity as of December 31, 2017: $635,000

b. Stockholders' equity as of December 31, 2018: $524,000

Explanation:

Please find the below for detailed explanation and calculations:

We have the Accounting Equation as: Total Asset = Total Liabilities + Total Equity <=> Total Equity = Total Asset - Total Liabilities

Applying the Accounting Equation to find the Stockholder's Equity at the two point of time require, we have the calculation as below:

* December 31, 2017:

Total Asset = $836,000; Total Liabilities = $201,000

<u>=> Total Stockholder's Equity = $836,000 - $201,000 =$635,000</u>

*December 2018:

Total Asset = $836,000 - $159,000 = $677,000; Total Liabilities = $201,000 - $48,000 = $153,000

<u>=> Total Stockholder's equity = $677,000 - $153,000 = $524,000 </u>

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3 years ago

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sineoko [7]

Answer: False

Explanation:

Question mentions that even though Worker A and Worker B are both paid the same salary and become less effective as their workload increase, Worker A is still more effective than Worker B.

The optimal allocation therefore would be one where Worker A get more of the 200 units of production than Worker B because they would be able to produce more as they are more effective.

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3 years ago

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givi [52]

Answer:

The correct option is false.

Explanation:

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Here, Eduardo isn't anticipating any results, however is adhering to being honest and straightforward to his clients. Henceforth, knowing the past predisposition doesn't exist.

7 0

3 years ago