Answer:
A
Explanation:
Net working capital is the difference between current assets and current liabilities.
To understand better, let us assume that the current assets of a company is $50 million and the current liabilities is $10 million. The net working capital is $40 million
If the company increased current assets to $70 million and reduced current liabilities to $5 million. the net working capital is $65 million
So, net working capital increases when a firm increases its current assets and decreases its current liabilities
Answer:
It means the cash is overstated.
Explanation:
An overstated balance is an account balance that is claimed to have a larger balance than would be the case. The overstated cash is present in the account.
Answer:
$0.6 per unit
Explanation:
The computation of the variable rate per unit of output is shown below:
But before that first we have to determine the variable cost which is
= Total utilities cost - fixed cost
= $2,600 - $2,000
= $600
And the number of units produced is 1,000 units
So, the variable rate per unit of output for utilities cost is
= $600 ÷ 1,000 units
= $0.6 per unit
Answer:
c. $3,750
Explanation:
Green Thumb Company provides two years warranty for any product defect. The provision needs to be made for the warranty expense and it should be reported in the balance sheet as warranty liability. The company budgets the warranty expense to be 2% in year of sales which is $2,400 ($120,000 * 2%) and 3% in the year after sale which is $1,350 ($45,000 * 3%). The total warranty liability for the year 2017 which will be reported at December 31, 2017 is $3,750.