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Mumz [18]
4 years ago
14

Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the FIFO method at the beginning

of 2018. The inventory as reported at the end of 2017 using LIFO would have been $60,000 higher using FIFO. Retained earnings at the end of 2017 was reported as $780,000 (reflecting the LIFO method). The tax rate is 40%. Required: 1. Calculate the balance in retained earnings at the time of the change (beginning of 2018) as it would have been reported if FIFO had been used in prior years. 2. Prepare the journal entry at the beginning of 2018 to record the change in accounting principle.
Business
1 answer:
otez555 [7]4 years ago
4 0

Answer:

Explanation:

1. The computation of the balance in retained earnings is shown below:

= Beginning retained earning balance + adjusted net income

where,

Beginning retained earning balance is $780,000

And, the adjusted net income is = Inventory × ( 1 - tax rate)

= $60,000 × (1 - 40%)

= $36,000

Now put these values to the above formula  

So, the value would equal to

= $780,000 + $36,000

= $816,000

2. The journal entry is shown below:

Inventory A/c Dr $60,000

   To Retained earning A/c $36,000

   To Tax payable A/c          $24,000

(Being inventory is adjusted and the remaining balance is credited to tax payable account)

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Sunset Foods relies on a highly centralized functional structure to ensure consistency in the quality and taste of its products
Rzqust [24]

Answer:

a. By establishing cross-functional teams.

Explanation:

Cross functional teams are the ones in which there are people from different departments. In this people from different departments works on the same common goal as set by the management to be achieved by the organization.

As the company has been working in the centralized functional structure, that means all the major decisions were taken by the executive management personnel, and accordingly the company can even in the establishment of cross functional team, can make this possible.

As all together each department will be working on this, and at the same time the management can keep access to the controls.

3 0
3 years ago
True or False: Suppose a firm's CFO thinks that an externality is present in a project, but that it cannot be quantified with an
GarryVolchara [31]

Answer:

False

Explanation:

Suppose a firm's CFO thinks that an externality is present in a project, but that it cannot be quantified with any precision ¾ estimates of its effect would really just be guesses. In this case, the externality should be ignored ¾ i.e., not considered at all ¾ because if it were considered it would make the analysis appear more precise than it really is. This is a false statement.

5 0
3 years ago
Read 2 more answers
A young man recently was hired by a major mortgage company in Tampa. Because he was unfamiliar with Tampa, the man purchased a r
Pavel [41]

Question Completion with Options:

A)  The man is not entitled to a refund, however, he may request that the $200 be applied to his down payment.

B)  He is entitled to a refund of $200 if requested in writing within 30 days of the contract date.

C)  He is entitled to a refund of $100 if requested within 45 days of the contract date.

D)  He is entitled to a refund of $150 if requested within 30 days of the contract date.

Answer:

The statement that applies to this situation is:

B)  He is entitled to a refund of $200 if requested in writing within 30 days of the contract date.

Explanation:

The Florida real estate laws provide that any real estate company that furnishes rental information to a prospective tenant for a fee must provide the prospective tenant with a receipt.  The receipt should contain the repayment provision, which can be made under specified conditions. However, the young man is expected to make his demand for a return of any part of the fee within 30 days from the date of the broker/sale contract.

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3 years ago
Internal control are not designed to safeguard assets from
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3 years ago
Ethier Enterprise has an unlevered beta of 1. Ethier is financed with 55% debt and has a levered beta of 1.1. If the risk free r
tresset_1 [31]

Answer:

The correct answer is 0.4%.

Explanation:

According to the scenario, the computation for the given data are as follows:

If no debt, then required return can be calculated by using following formula:

Required return ( no debt) = Risk free rate + Unlevered Beta × Market risk premium

= 6% + 1 × 4%

= 0.06 + 0.04

= 0.10 or 10%

If debt, then required return can be calculated by using following formula:

Required return ( with debt) = Risk free rate + levered Beta × Market risk premium

= 6% + 1.1 × 4%

= 0.06 + 0.044

= 0.104 or 10.4%

So, extra premium required = 10.4% - 10% = 0.4%

6 0
3 years ago
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