Answer:
Debit Supplies expense account (P/L) $1,245
Credit Supplies account (B/S) $1,245
Explanation:
The adjustment required is for the supplies used up during the period.
This can be determined by the net movement in the supplies account considering the opening balance, the purchases or additions and the closing balance.
Supplies used up = $330 + $1,500 - $585
= $1,245
The adjusting entries required is
Debit Supplies expense account (P/L) $1,245
Credit Supplies account (B/S) $1,245
Being entries to recognize supplies used up during the period
Answer:
It is an example of Foreign uncontrollable environmental elements
Explanation:
Foreign uncontrollable elements involve the physical and geographical, competitive forces, social and cultural, economic forces, level of technology and the political as well as legal forces.
So, in this case, James want to expand the facility of manufacturing to a 24 hour day but there is a unwritten rule that the workday must finish or end at 5:00 PM. Therefore, unwritten rule is the foreign uncontrollable element which affects the cultural environment of the factory. And James cannot influence or control the circumstance and instead need to follow his operations facility.
Answer:
The independent decisions of individuals in the marketplace determine the answers to the fundamental economic questions.
Explanation:
The study of Economic Science allows us to understand the fundamental premises that govern the functioning of market economies. A market economy operates freely - the decisions of the economic agents are independent - which leads us to understand determining questions, such as how much to produce and how much to employ.
A market economy operates under the logic of the interaction between supply and demand of goods and services, so that companies act in a system of competition, via prices, for market share. Thus, consumers benefit from competition and the role of government is only to ensure the right environment for economic transactions.
Answer:
Risk-free rate = 3.5%
Market risk-premium = 6.9%
Cost of equity (Ke) = ?
Ke = Rf +β(Rm - Rf)
Ke = Rf + Market risk premium
Ke = 3.5 + 6.9
Ke = 10.4%
Cost of debt (Kd) = 5.4%
Market value of debt (D) = 12
Market value of equity (E) = 88
Market value of the company (V) = 100
WACC = Ke(E/) + Kd(D/V)(1-T)
WACC = 10.4(88/100) + 5.4(12/100)(1-0.40)
WACC = 9.152 + 0.3888
WACC = 9.54%
Explanation:
In this case, there is need to calculate cost of equity according to capital asset pricing model, which is risk-free rate plus market risk-premium.
Then, we will calculate the weighted average cost of capital, which equals cost of equity multiplied by the proportion of equity in the capital structure plus after-tax cost of debt multiplied by the proportion of debt in the capital structure. Since the proportion of debt in the capital structure is 12%(12/100), the proportion of equity will be 88%(88/100).
Answer:
$19,600.
Explanation:
The prudence concept of Accounting, also known as Conservatism Principle, requires management to record loss if there is an expectation to incur it. This principle gave birth to the concept of Bad Debts. Companies estimate the amount of Accounts Receivable that will not be collectible by Aging. An expense is recorded in the Statement of Profit or Loss by the calculated amount, whereas a credit entry to match the debit is charged to Allowance for Doubtful Account which is a contra-asset account to Accounts Receivable.
Oriole has estimated that $25,500 (2% of 1.26 million) of receivables will be uncollectible. A debit entry for Bad Debts is recorded in P&L and a credit to it will be charged to Allowance for Doubtful Account. This contra-asset account already has a opening debit balance of $5,900, the balance after adjustment for bad debts will be $19,600 (25,500 - 5,900).