Answer:
Prosecutors of this case can use the net worth method to determine the extent these executives have been receiving illegal incomes by computing their wealth at the beginning and at the end of the period under investigation.
There will be an increase in the executives wealth, and since this increase cannot be traced to any legal income source, it will become taxable income, with the calculated penalties and fines.
Explanation:
The net worth method specifies that any increase in wealth, which is not traced to non-taxable sources, should be determined as a taxable income for the period under review. Ordinarily, the net worth is the difference between assets and liabilities. Since the executives use the money personally at their convenience, this will increase their personal wealth.
The cost of goods sold for the Askew Company for the year ending June 30, 2021 is $233,000.
Using this formula
Cost of goods sold=Beginning Inventory+ Net purchases- Ending Inventory
Where:
Beginning Inventory=$32,000
Net purchases=($240,000-$6,000-$10,000+$17,000)=$241,000
Ending Inventory=$40,000
Let plug in the formula
Cost of goods sold=$32,000+$241,000-$40,000
Cost of goods sold=$233,000
Inconclusion the cost of goods sold for the Askew Company for the year ending June 30, 2021 is $233,000.
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Answer:
a. Cash for $180
Explanation:
The receipts from the petty cash fund indicate that the owner of the box made purchases adding up to $177. Therefore that money is no longer part of the fund. Since the fund holds $200 and currently only has $20 then to replenish the account the journal entry would need to include a credit to cash for $180 ... ($200-$20=$180)
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Answer:
b. Bob listens to the radio station several hours per day but never donates since he suspects that other people will donate enough to keep the station on the air.
. Jim is working on a group project for a class in which he wants a high grade. However, since the grades are assigned to the group as a whole and he knows that the other group members will pick up most of the extra work, Jim calls in sick and plays video games on his Dream Station 64.
Explanation:
Free riding is when a person enjoys the benefit of a good or service but doesn't pay for it. This is a form of market failure.
Bob listens to the radio but doesn't donate and Jim would benefit from the grade given to the group but doesn't participate. These are instances of free riding.
Karl doesn't drive at night and so doesn't enjoy the benefits of the street light and doesn't pay. This is not an instance of free riding.
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Answer:
The journal entries to record service revenue during July should be:
Dr Cash 3,600
Cr Service revenue (80 hours per month) 3,600
Dr Accounts receivable [(115 - 80 hours) x $40] 1,400
Cr Service revenue 1,400
Since the company has collected only the regular hours provided according to the contract, the remaining hours should be recorded as accounts receivable.
