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Bond [772]
3 years ago
14

Vibrant Company had $1,020,000 of sales in each of Year 1, Year 2, and Year 3, and it purchased merchandise costing $560,000 in

each of those years. It also maintained a $320,000 physical inventory from the beginning to the end of that three-year period. In accounting for inventory, it made an error at the end of Year 1 that caused its Year 1 ending inventory to appear on its statements as $300,000 rather than the correct $320,000. Required: 1. Determine the correct amount of the company’s gross profit in each of Year 1, Year 2, and Year 3. 2. Prepare comparative income statements to show the effect of this error on the company's cost of goods sold and gross profit for each of Year 1, Year 2, and Year 3.
Business
1 answer:
aleksley [76]3 years ago
6 0

Answer:

Explanation:

a

                        Year 1                  Year 2       Year 3

Opening inventory    320,000   320,000    320,000

Purchase                    560,000   560,000    560,000

Closing inventory       320,000   320,000    320,000

sales                          1,020,000   1,020,000  1,020,000

Gross profit                460,000     460,000     460,000

b                          

                                       Year 1              Year 2                Year 3

Sales                              1,020,000          1,020,000        1,020,000

Opening inventory           320,000             300,000           320,000

Purchase                          560,000              560,000           560,000

Closing inventory             300,000              320,000            320,000

Gross profit                       440,000               480,000            460,000

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4 0
2 years ago
2. Fiscal policy Suppose a hypothetical economy is currently in a situation of deficient aggregate demand of $32 billion. Four e
Umnica [9.8K]

Answer:

For the Economist A the spending multiplier  is = 8, the tax multiplier = 4, the increase in spending is = $4 billion, the tax cut is = $8 billion.

For the Economist B, the spending multiplier is =4, the tax multiplier = 2, the increase in spending is = $8 billion, the tax cut is = $16 billion.

Explanation:

Solution

Given that:

(1)The Economist A

The Spending multiplier = 8

In closing the output gap of $32 billion, required increase in spending = $32 billion / 8 = $4 billion

Thus,

The tax multiplier = 4

To close output gap of $32 billion, required decrease in tax = $32 billion / 4 = $8 billion

(2)The Economist B

Now,

The spending multiplier = 4

To close output gap of $32 billion, required increase in spending = $32 billion / 4 = $8 billion

So,

Tax multiplier = 2

To close output gap of $32 billion, required decrease in tax = $32 billion / 2 = $16 billion

8 0
2 years ago
Corning, Inc. transforms a blend of materials to create optical fiber capable of carrying much of the telephone traffic in the U
astra-53 [7]

Answer:

B. Industrial

Explanation:

6 0
3 years ago
Ben learns that the company was going to be laying off several employees over the next several months. He knew that the rumor mi
sleet_krkn [62]

Answer:

D. Call an all staff meeting and give everyone the news at once.

Explanation:

Instead of letting the rumors spread throughout the company, what Ben is supposed to do is have a meeting with his entire staff and let all of them know at once what's going on. This way, he will be clear and direct and won't allow for gossip to spread throughout his company and he himself will address the issue head-on. This way he won't leave room for misinterpretation as he will explain what is going to happen.

5 0
3 years ago
Lindsey Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A
natita [175]

Answer:

Results are below.

Explanation:

<u>First, we need to calculate the activities rate:</u>

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Activity 1= 24,000 / 1,000= $24 per activity unit

Activity 2= 36,900 / 900= $41 per activity unit

Activity 3= 63,000 / 1,800= $35 per activity unit

<u>Now, we can allocate costs to product A:</u>

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Activity 1= 24*200= $4,800

Activity 2= 41*750= $30,750

Activity 3= 35*1,000= $35,000

Total allocated costs= $70,550

<u>Finally, the unitary cost:</u>

Unitary cost= 70,550 / 5,000= $14.11

3 0
3 years ago
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