Answer:
ensures that all costs are covered
Explanation:
Common fixed expenses is support the operation of many segments. It is not visible in whole segment or in the part of any segment.
Allocating common fixed expenses to business segments may reason the managers to wrongly terminated business segments because it’s artificially increases each segment of break even point. Even after discontinuation of common fixed expenses, it will happen continuously.
So According to the analysis, option (C) is correct.
Answer:
(B) Creditor can only insure the debtor for the amount owed.
Explanation:
Credit life policy is a credit life insurance policy arranged to pay off a debtor's outstanding loan if the debtor dies, becomes disabled or unemployed before fully repaying the debt. So the creditor can only insure the debtor for the amount owed in credit life policy.
Answer:
$190.64
Explanation:
Data provided in the question:
Current selling price of shares = $180 per share
Dividend paid = $10.18
Expected growth rate, g = 6% = 0.06
Required rate of return, r = 12% = 0.12
Now,
The dividend for the following year to the next year, D1 = $10.18 × (1 + g)ⁿ
here, n = 2 ( i.e the duration of next year and the following year )
thus,
D1 = $10.18 × (1 + 0.06)²
or
D1 = $11.438
Therefore,
Price of stock one year from now = 
= 
= 190.637 ≈ $190.64
Answer:
d. Line 3
Explanation:
Generally, the liabilities are classified as current and long term based on their duration, on the date of issue of notes payable the liability is long as the period is of 1 year, whereas generally notes payable are not for 1 year and are termed as short term i.e. current liabilities.
But, on 31 Dec 2017 the period to pay the notes payable and the interest thereon is just of 7 months left, therefore on the balance sheet date both the liabilities will be considered and clarified as Current Liabilities.
Therefore, correct option is
d. Line 3
Answer:
Explanation:
The journal entries are shown below:
On April 5
Inventory A/c Dr $23,000
To Account payable A/c $23,000
(Being the inventory purchased is recorded)
On April 6
Inventory A/c Dr $900
To Cash A/c $900
(Being the freight cost is paid)
On April 7
Equipment A/c Dr $26,000
To Account payable A/c $26,000
(Being the equipment is purchased on credit)
On April 8
Account payable A/c Dr $3,000
To Inventory A/c $3,000
(Being the returned inventory is recorded)
On April 15
Account payable A/c Dr $20,000 ($23,000 - $3,000)
To Inventory A/c $400 ($20,000 × 2%)
To Cash A/c $19,600
(Being the amount due is paid)
