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Nana76 [90]
2 years ago
12

In 2021, internal auditors discovered that PKE Displays, Inc. had debited an expense account for the $350,000 cost of equipment

purchased on January 1, 2018. The equipment’s life was expected to be five years with no residual value. Straight-line depreciation is used by PKE.
Required:

1. Determine the cumulative effect of the error on net income over the three-year period from 2018 through 2020, and on retained earnings by the end of 2020.

2. Prepare the correcting entry assuming the error was discovered in 2021 before the adjusting and closing entries. (Ignore income taxes.)

3. Assume instead that the equipment was disposed of in 2022 and the original error was discovered in 2023 after the 2022 financial statements were issued. Prepare the correcting entry in 2023.
Business
1 answer:
kap26 [50]2 years ago
3 0

Answer:

1. 210.000

2. 140.000

3. No entral journey is required.

Explanation:

  1. To calculate the accumulated depreciation of the equipment:

Accumulated depreciation = depreciation expected for 1 year * 3 years

                    = (Cost of the asset - Residual Value)/Life of the asset  * 3 years  

                    = ((350.000 - 0) / 5) * 3              

                    = 210.000        

   2. Calculate the amount to be adjusted to the retained earnings as show below:

Amount to be adjusted = Expense Wrongly debited - depreciation expense for 3 years.

= 350.000 - 210.000

=140.000

3. No journal entry is required to record in the books of accounts because the equipment will not have any value after 2019.

Thus, no journal entry is required.

     

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Two firms, A and B, each currently emit 100 tons of chemicals into the air. The government has decided to reduce the pollution a
katrin2010 [14]

Answer:

20 more tons of pollution into the air, and Firm B will emit 100 fewer tons of pollution into the air.

Explanation:

It is given that :

Amount of tons of pollutants emitted by the two firms A and B earlier = 100 tons

Cost of pollutants by firm A = $ 200 per ton of pollutions

Cost of pollutants by firm B = $ 100 per ton of pollutions

Since the cost for eliminating the pollutants into the air is more for the firm A, the ticket is also more valuable for firm A. And therefore, firm A will buy all the tickets form firm B for an amount around $ 101 to $ 199. It will do so as to have a positive consumer and also to produce surplus.

So firm A will eliminate 20 tons of pollution and will use 80 ton capacity from the tickets. And for firm B, it will eliminate all 100 tons of pollutions.

4 0
2 years ago
Smith Pharmaceuticals is trying to estimate the breakeven volume of sales on a newly developed drug. Which of the following woul
ahrayia [7]

Answer:

An increase in the unit (per pill) contribution margin.

Explanation:

Breakeven point is defined as the level of sales where total cost is equal to total revenue.

The formula is given as

Breakeven= Fixed cost ÷ (Sales revenue -Variable cost)

Note the Sales revenue less variable cost is the contributing margin.

Breakeven= Fixed cost ÷ Contributing margin

To reduce breakeven we must either reduce the numerator or increase the denominator.

In this case an increase in contributing margin will result in a decrease in breakeven amount of the company.

8 0
3 years ago
Which approach describes how leaders act?
emmainna [20.7K]

Answer:

d. Behavioral

Explanation:

Behavioral approach defines how a leader interact with its followers. It also includes the actions of a leader towards its followers.

In behavioral approach to leadership, anyone can become a leader if they want to, but such leader trainings and observations for effective leadership. The behavioral approach centers on interpersonal relationship between a leader and its followers. There is also an aspect of behavioral approach - task behavior which focuses on workers achieving set targets at workplace while relationship behavior help workers feel safe and comfortable by their leaders in their place of work.

4 0
2 years ago
Regina, the CEO of a popular health magazine, subscribes to 20 other magazines to follow the industry trends, understand the fin
Akimi4 [234]

Answer:

the monitor role

Explanation:

As stated by Henry Mintzberg, managerial roles can be divided into three basic categories:

  1. informational roles: includes monitor, disseminator and spokesperson roles.
  2. interpersonal roles: includes figurehead, leader and liaison roles.
  3. decisional roles: includes the entrepreneur, disturbance-handler, resource-allocator and negotiator roles.

The monitor role requires the manager to seek out information related to the organization and industry, and monitor the organization's productivity and well-being.

8 0
3 years ago
Jimmy's Peanut Farm wants to increase the quantity of peanuts that it sells by 1 percent. The price elasticity of demand for pea
slega [8]

Answer: Jimmy's Peanut Farm has to decrease its prices by 2.5% in order to achieve a 1% increase in the quantity of peanuts it sells.

Jimmy's Peanut Farm can increase the quantity sold by 1% only when the demand for peanuts increases. Demand for peanuts will increase only when the price of peanuts decrease. The Price Elasticity of Demand measures the responsiveness of demand to a percentage change in price.

The formula for Price Elasticity of Demand (PED) is given by the formula:

\mathbf{PED = \frac{percentage change in quantity}{percentage change in price}}

We have:

Percentage increase in quantity               1%  or 0.01

Price Elasticity of Demand (PED)               0.40

Re-arranging the PED formula above we get,

\mathbf{percentage change in price}= \frac{percentage change in quantity}{PED} *100}

Substituting the values in the equation above we get,

{percentage change in price} = \frac{0.01}{0.4}*100 =2.5



5 0
3 years ago
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