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Luden [163]
2 years ago
8

In 2014, Orear Manufacturing signed a contract with a supplier to purchase raw materials in 2015 for $700,000. Before the Decemb

er 31, 2014 balance sheet date, the market price for these materials dropped to $510,000. The journal entry to record this situation at December 31, 2014 will result in a credit that should be reported:a. as a valuation account to Inventory on the balance sheet.b. as a current liability.c. as an appropriation of retained earnings.d. on the income statement.
Business
1 answer:
RSB [31]2 years ago
4 0

Answer:

a. as a valuation account to Inventory on the balance sheet

Explanation:

The inventory write-down could be done through the balance sheet or the income statement, it depends of the total amount of the adjustment.

If it's a small adjustment, the company make a credit adjustment to the inventory accounts and a  debit to the cost of goods sale in the income statement.

But if the adjustment is larger it's necessary to reduce the value of the inventories through the balance sheet with a debit in an account such as “write-down damaged goods.”

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Calculate Payroll An employee earns $44 per hour and 1.5 times that rate for all hours in excess of 40 hours per week. Assume th
Marrrta [24]

Answer: $1750

Explanation:

Given Data

Earnings = $44/ hr

Overtime Earnings = 1.5 times Of $44

= $66

Hours worked during the week = 55 hrs

Social security tax rate = 6.0%

Medicare tax rate = 1.5%

Federal income tax = $633

Therefore:

Gross pay = Normal pay + overtime pay

Normal pay

= $44 * 40 hrs

= $1760

Overtime pay

= $66 * 15 hrs

= $990

Gross pay = $1760 + $990

= $1750

Social security tax

= 0.06 * $2750

= $165

Medicare tax

= 0.015 * $2750

= $41.25

Total tax

= $633 + $41.25 + $165

= $839.25

Net pay

= $2750 - $839.25

= $1910.75

6 0
3 years ago
Suppose you just won the state lottery, and you have a choice between receiving $3,500,000 today or a 20-year annuity of $250,00
xeze [42]

Answer: The correct answer is e). 3.67%

Explanation: An ordinary annuity is a series of payments made at the end of each period.

The formula for ordinary annuity is PV = PMT × ((1 - (1 + r) ^ -n)/ r)

Where; PMT = the periodic cash payment; r = the interest rate per period; n = the total number of periods and PV = present value.

Therefore; 3500000 = 250000×((1-(1+r)^-20)/r

This will give the rate as 3.67%

4 0
3 years ago
Use demand and supply diagrams (with proper labels and arrows) to show the effect of
Arte-miy333 [17]

Answer:

Please check the attached images for the graphs

Explanation:

a.DVD players and DVDs are complements

Complement goods are goods that can be used together. If the price of one Dvd payers falls, the demand for DVDs would increase. This would lead to a rightward shift of the demand curve. Equilibrium price and quantity would increase

b. As a result of the report, the demand for chocolate candy bars increases. This would lead to a rightward shift of the demand curve. Equilibrium price and quantity would increase

c. As a result of the policies, the demand for cigarettes would fall. This would lead to a leftward shift of the demand curve. Equilibrium price and quantity would fall.

d. As a result of the automation, there would be less need for unskilled labour. As a result, the demand for unskilled labour would fall. This would lead to a leftward shift of the demand curve. Equilibrium price and quantity would fall.

e. increase in interest rate increases the demand for bonds. This would lead to a rightward shift of the demand curve. Equilibrium price and quantity would increase

f. as a result of the flooding, there would be a reduction in supply. The supply curve would shift leftward. Equilibrium price would rise and equilibrium quantity would fall

5 0
3 years ago
Custom Computers, Inc. assembles custom home computer systems. The heat sinks needed are bought for $14 each and are ordered in
belka [17]

Answer:

EOQ = 609.91 units

Average inventory= 600 units

Number of orders = 5.2 times

Annual inventory holding cost =$1,200

Annual ordering cost = $312

Total cost = $88,312

Explanation:

EOQ =√ (2× Co× D)/Ch

EOQ= ? , Co-60, Ch- 2, D- 6200

EOQ = √(2× 60× 6200/2)

EOQ = 609.9180273

Average inventory =  minimum level +EOQ/2

= 1200 /2 = 600 units

Number of orders = Annual demand/ order quantity

                     = 6,200/1200 =  5.166

Number of orders = 5.2 times

Annual inventory holding cost = Average inventory × holding cost per unit

        =600 × $2 =$1,200

Annual ordering cost = No of orders × ordering cost per order

                        = 5.2 times × 2 =$312

Annual inventory cost = Purchase cost + Ordering cost + Holding cost

Purchase cost=Annual demand× unit price 14× 6200= 86,800

Total cost = 86,800  + $1,200+ $312

                =88312

8 0
2 years ago
​ If the Fed announces that it will decrease U.S. interest rates, and the European Central Bank takes no action, then the value
Tcecarenko [31]

Answer:

c. appreciate

Explanation:

If the Federal Reserve reduces the interest rate of the US dollar this will lead to lower cost of funds, more people will borrow money and this increases money supplied to the economy.

Excess money will pursue less goods leading to inflation where the purchasing power of the US dollar will reduce.

All things being equal the value of the euro will appreciate against the US dollar if interest rate is decreased.

As the euro strengths against the US dollar, one will need less euros to purchase the weakened dollar.

6 0
2 years ago
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