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4 years ago

Which of the following changes would not be accounted for using the prospective approach?

Business

1 answer:

Liono4ka [1.6K]4 years ago

6 0

Answer: Option A

Explanation:

Prospective approach is used for bring changes into accounts. In the LCNRV rule the accounting principle of lesser value of the stock is so that the amount sold can be mentioned as the net realizable value (NRV). Here the principle of using low cost of net realizable value is known as LCNRV. This cannot be changed using prospective approach.

Other changes such as the depreciation from straight line to double declining depreciation, LIFO from average costing for inventories and other change from double declining to straight line depreciation can be done with the prospective approach.

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7. Gold Company has budgeted the following costs for the production of its only product: Direct Materials $75,000 Direct Labor 5

STatiana [176]

Answer:

$68 = unitary variable cost

Explanation:

Giving the following formula:

Gold Company wants a profit of $100,000

Production= 2,500 units

Selling price= $125

Fixed indirect production costs 27,500

Fixed selling and administrative costs 15,000

To calculate the target total unitary variable cost, we need to use the following formula:

number of units sold= (desired profit + fixed costs) / (selling price - unitary variable cost)

2,500= (100,000 + 27,500 + 15,000) / (125 - unitary variable cost)

312,500 - 2,500unitary variable cost = 142,500

170,000 = 2,500unitary variable cost

$68=unitary variable cost

3 0

3 years ago

On December 31, 20X1, Ball Company leased a machine from Cook for a 10-year period, expiring December 30, 20Y1. Annual payments

hjlf

Answer:

Therefore, the lease liability is $533,600 and the current liability is $46,640.

Explanation:

4 0

3 years ago

What is a normal good? a. A good whose demand increases when income decreases b. A good whose demand decreases when income

4vir4ik [10]

Answer:

. A good whose demand decreases when income decreases

Explanation:

A normal good is a product whose demand increases as consumers' income increases. The demand may also increase as economic conditions in the country improve. Similarly, when income decrease, the demand also declines.

As people income increase, the purchasing power increase. They prefer more costly goods than give them more satisfaction. Increased income tends to make consumers abandon goods that offer less utility. Normal goods tend to be associated with customers in high-income.

4 0

4 years ago

"on may 1, mesa verde, inc. purchased a 2-year insurance policy for $15,600. prepaid insurance was debited for the entire amount

N76 [4]

The journal entry on May 1 was:

A debit to Prepaid Insurance for 15,600

And a credit to cash for 15,600

Prepaid Insurance is the share of an insurance premium that has been paid in early and has not finished as of the balance sheet date.

The monthly insurance payment for two years is computed by 15,600/24 months which is $650 per month.

At December 31 the adjusting entry would be:

A debit to Insurance Expense 5,200

And a credit to Prepaid Insurance for 5,200

5,200 is computed by:

650 x 8 months (starting from May 1 to December 31) = 5,200

5 0

3 years ago

You are given the following long-run annual rates of return for alternative investment instruments: U.S. Government T-bills 3.10

Dvinal [7]

Answer:

The real rate of return is 0.10%

Explanation:

For computing the real rate of return, we need to apply the formula which is shown below:

( 1 + nominal rate) = ( 1 + real rate) × (1 + inflation rate)

So,

The real rate = {(1 + nominal rate) ÷ (1 + inflation rate)} - 1

= ((1 + 3.10%) ÷ (1 + 2%)} - 1

= (1.031 ÷ 1.02) - 1

= 1.0107 - 1

= 0.10

The Government T-bills is only the nominal rate so we considered this only

5 0

4 years ago