Answer:
B) A loss of $6,000 in the income statement.
Explanation:
The appropriate journal entry should be:
December 31 (recognition of loss on purchase commitments)
- Dr Loss on Purchase Commitments account 6,000
- Cr Accrued Loss on Purchase Commitments account 6,000
Since the price of raw materials lowered by $6,000, the company lost money on its purchase commitments:
Purchase commitments loss = contracted price - market value = $32,000 - $26,000 = $6,000
The loss on purchase commitments is an expense, and accrued loss on purchase commitments is a liability.
Answer:
d. $878,000
Explanation:
The computation of the cost of goods manufactured is shown below:
= Direct materials cost + Direct labor cost + Manufacturing overhead cost + beginning work-in-
process inventory - ending work-in-process inventory
= $346,000 + $212,000 + $315,000 + $56,000 - $51,000
= $878,000
We simply deduct the ending balance of work in process inventory and the rest items are added to find out the cost of goods manufactured
Answer:
$894.65
Explanation:
Given data:
n= time = 10 years
par value= $1000
annual coupon = 5.5%
interest rate = 7.0%
bond price = present value of interest + present value of redemption value.
present value of interest:
C = 5.5% of 1000 = $55
PV = C x (1 - (1 + r)^(-n)/r
PV = 55 x 1.07^(-10)/0.07
PV = 386.3
present value of redemption value:
pv = f / (1 + r)^(n)
where f = par value
PV = 1000 / (1.07)^(10)
PV = 508.35
summing up both values
508.35 + 386.3
= $894.65
Answer: $650,000
Explanation:
Given that,
Fair and par value of issued bonds = $150,000
Prior acquisition, McGuire reported
Total assets = $500,000
Liabilities = $280,000
Stockholders’ equity = $220,000
At that date, Able reported
Total assets = $400,000
Liabilities = $250,000
Stockholders’ equity = $150,000
Account payable to McGuire = $20,000
Total assets reported by McGuire after acquisition:
= Total assets + Fair value of investment
= $500,000 + $150,000
= $650,000
It shows a pattern of responsibility.
If you have only had accounts for 1 month, it doesn't really give a full picture of whether or not you always make your payments on time, etc. However if you have had accounts for 20 years, creditors have more history to look through to determine if you are responsible.
Keep in mind, checking and savings accounts are not the primary type of accounts that creditors want to look at because those only deal with spending money you already have. Lenders really want to know how you handle money that you <em>borrow</em>, such as school loans, credit cards, rent payments, and auto loans.
