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miv72 [106K]
3 years ago
9

On March 1, Retro Inc. reported a balance in Supplies onf $200. During March, the company purchased supplies for $950 and consum

ed supplies of $800. If no adjusting entry is made for supplies
a. stockholer's equity will be overstated by $800.
b. assets will be understated by $350.
Why the answer is (a)? and why (b) is wrong answer?
Business
1 answer:
-BARSIC- [3]3 years ago
4 0

Answer:

stockholer's equity will be overstated by $800.

Explanation:

The adjustment required is to record $800 of supplies used as an expense, hence, by carrying out the adjustment, net income is overstated by $800 so also retained earnings and shareholders' equity.

In other words,the balance that would be left in supplies is opening balance of $200 plus purchase of supplies which is $950 minus the supplies used.

balance of supplies=$200+$950-$800=$350

Option B is wrong the balance expected is $350 and the balance without adjustment is $200,that is $150 understatement not $350

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Answer:

the intrinsic value of the stock is $60

Explanation:

The computation of the intrinsic value of the stock is as follows:

But before that the cost of equity is

The Cost of Equity is

= Risk Free Rate + Beta × (Market Return - Risk Free Rate)

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Now

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7 0
3 years ago
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Answer:

left by 30 billons

then right by 40 billons

Explanation:

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Then, as the interest rate fall the aggregate demand curve will move to the right as the investing increase as now more projects are profitable.

<em>Calculations:</em>

<em />

5 billon for every point of wealth:

6 points x 5 billon = 30 billons

20 billion of inventing per 1% of interest rate decrease

2 points x 20 billions = 40 billons

7 0
4 years ago
Which one of the following actions will increase the current ratio, all else constant? Assume the current ratio is greater than
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Answer:

C) Cash payment of an account payable

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Human relations.

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The answer is A because with a sole proprietorship you can have many partners each contributing small amounts of money, that would add up to a larger amount. :)
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3 years ago
Read 2 more answers
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