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forsale [732]
4 years ago
13

On December 31, Year 4, Deal, Inc., failed to accrue the December Year 4 sales salaries that were payable on January 6, Year 5.

What is the effect of the failure to accrue sales salaries on working capital and cash flows from operating activities in Deal’s Year 4 financial statements?
Business
1 answer:
Lesechka [4]4 years ago
5 0

Answer:

Deal, Inc. working capital will be overstated while there will be a nil net effect on cash flows from operating activities.

Explanation:

The working capital of an entity is the difference between the entity's current asset and current liabilities at a given time or period. The operating activities of the cash flow statement is where the net income and changes in current liabilities are considered in the cash flow statement.

As such, when a company fails to accrue for sales salaries On December 31, Year 4, and the salaries are payable on January 6, Year 5, the current liabilities of the company would be understated and as such, it's working capital will be overstated.

Also, the net income will be understated as the corresponding entry in the accrual for sales salaries is an expense. Also, the ending balance of accrued sales salaries will be understated result in a nil effect on the operating activities of the cash flow.

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If the nominal interest rate is 5 percent and the real interest rate is 2 percent, then the inflation premium is:________.A. 8 p
sdas [7]

Answer:

Inflation rate= 0.03 = 3%

Explanation:

Giving the following information:

Nominal interest rate= 0.05

Real interest rate= 0.02

<u>To calculate the inflation rate, we need to use the following formula:</u>

Real interest rate= nominal interest rate - inflation rate

Inflation rate= nominal interest rate - real interest rate

Inflation rate= 0.05 - 0.02

Inflation rate= 0.03 = 3%

5 0
3 years ago
Hunter’s paradise sells merchandize on account to outdoor haven for $3,280, terms 2/10, n/30. what should the journal entry be t
Schach [20]
These are payment terms in the accounting. The first term 2/10 means that if you can pay the amount after 10 days, you would be given a 2% discount. If not, that's what the second terms means. This means you have to pay the net or full amount within 30 days.

So, if he can pay within 10 days, he will only have to give $3214.4. If not, then he would have to pay $3280 within 30 days.
4 0
3 years ago
Read 2 more answers
Why would a designer choose white for hotel towels?
lapo4ka [179]
The answer is To give a sense of luxury
7 0
3 years ago
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Suppose that coffee growers sell 200 million pounds of coffee beans at $2 per pound in 2015 and 240 million pounds for $3 per po
steposvetlana [31]

Answer:

B and C

Explanation:

The law of demand states that the higher the price, the lower the quantity demanded. This means that at a higher price, the quantity of coffee that should be demanded should decrease.

Hence, since there was an increase in the price of the coffee per pound in 2016, we expect that there should be less sales. Instead, there was still an increase.

Also, we can see that the the demand for coffee has increased. More pounds of coffee is needed which creates an increase in supply which thus has driven up the price

4 0
3 years ago
You have the following information on Olivia's Bridle Shop: total liabilities and equity = $65 million, current liabilities = $1
Pepsi [2]

Answer:

Total Fixed Assets = 20 million

Explanation:

Total liabilities and equity = $65 million

Current liabilities = $10 million

Inventory = $15 million

Quick ratio = 3 times.

As we know

Total liabilities and equity = Total Assets

65 Million = Total Fixed Assets + Total Current Assets

65 Million = Total Fixed Assets + 45 million

Total Fixed Assets = 65 million - 45 million

Total Fixed Assets = 20 million

Quick Ratio = ( Total Current Assets - Inventory ) / Total Current Liabilities

3 = ( Total Current Assets - 15 million ) / $10 Million

3 x $10 Million = Total Current Assets - 15 million

30 million = Total Current Assets - 15 million

30 million + 15 million = Total Current Assets

Total Current Assets = 45 Million

8 0
3 years ago
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