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dezoksy [38]
3 years ago
5

Capitalizing costs that should be expensed: a. is a practice mostly found in large, well-established companies. b. is a healthy

practice if they written off shortly after the transaction takes place. c. usually has no effect on net income. d. has the effect of increasing net income by the same amount of the capitalized costs.
Business
1 answer:
EleoNora [17]3 years ago
8 0

Answer:

Option D. Has the effect of increasing net income by the same amount of the capitalized costs.

Explanation:

The reason is that the capitalized costs are the invesments in any assets whose useful life is more than one year and must be depreciated over useful life of the assets. If a expense nature cost is capitalized which must not be capitalized according to IAS 16 Porperty, Plant & Equipment then the expenses are understated which means that the profits are overstated. This means that presenting expenses as assets will increase the profits as costs will be fewer in amount presented in the financial statements.

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Joe decides that he will contribute $5,000 a year to his 401(k) plan when he starts saving for retirement. What is the best acti
AfilCa [17]
I feel that the answer would be C as that would give it the most time to grow and build, but I have heard many times that IRA's can be better as far as tax. I would go with C, unless your class has specifically been leaning about IRA's. 
5 0
3 years ago
Cary is experiencing cash flow problems during the current year. Rather than foreclose an $80,000 business loan, his bank agrees
Nata [24]

Answer:d. $30,000

Explanation:

The reduction of loan amount from $80,000 to $50,000 means carry has gained the difference of $30,000 by paying less than the value of loan he has received.

On an overall analysis the net asset will improve from -$10,000 to $20,000 but the income from the loan reduction is $30,000 i.e,$80,000 minus $50,000.

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3 years ago
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When Larry purchased a Jet Ski personal watercraft for $4,999, he was also given free financing and three hours of free lessons
stellarik [79]

Answer:

Value added

Explanation:

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The value of this difference help to determine the profit on products.

Higher the value of add, higher will be the charges of product and higher will be the revenue collected.

4 0
3 years ago
On April 1, Sangvikar Company had the following balances in its inventory accounts:
noname [10]

Answer:

a.

DR Raw Material Inventory                             $30,000

CR Accounts Payable                                                     $30,000

b.

DR Work in Process Inventory                          $33,900

CR Raw Material Inventory                                                $33,900

Working

= Job 114 + Job 115 + Job 116

= 16,500 + 12,400 + 5,000 = $33,900

c.

DR Work in Process                                            $‭7,430‬

CR Wages Payable                                                             $‭7,430‬

Working

= (150 * 15) + (220 * 17) + (80 * 18)

= $‭7,430‬

d.

DR Work in Process                                              $‭4,458‬

CR Manufacturing Overhead                                              $‭4,458‬

Working

Overhead as % of Direct labor cost using Job 115 = Applied Overhead / Direct labor = 936/1,560 = 60%

Manufacturing Overhead = Overhead rate * Direct labor

= 60% * 7,430 = $‭4,458‬

e.

DR Manufacturing Overhead                                     $4,765

CR Accounts Payable                                                              $4,765

f.

DR Finished Goods                                                    $‭23,520‬

CR Work in Process                                                                   $‭23,520‬

Job 115 costs = Beginning + Material + Labor + Overhead

= (2,640 + 1,560 + 936) + 12,400 + (220 * 17) + (220 * 17 * 60%)

= $‭23,520‬

g.

DR Cost of Goods sold                                               $‭23,520‬

CR Finished Goods                                                                     $‭23,520‬

DR Accounts Receivable                                            $‭32,928‬

CR Cost of Goods sold                                                              $‭32,928‬

Working

= ‭23,520‬ * 140%

= $‭32,928‬

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3 years ago
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