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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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Answer:

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3 years ago
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Answer:

The assets turnover for the three companies are as follows:

YRC Worldwide Union      1.54  

Pacific C.H.                       0.40  

Robinson Worldwide Inc     4.84  

Asset turnover implies how much sales generated by an organization from $1 of asset deployed to the business.

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Explanation:

        YRC Worldwide Union Pacific C.H.  Robinson Worldwide Inc

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Average Total Assets 2,812,504.00   42,636,000.00   1,914,974.00  

Asset turnover=net sales/average total assets

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