Answer and Explanation:
Fair value refers to the current market price of the asset while historical cost is the cost at which the asset was acquired. Fair market value will always be higher than historical cost so it reflects the actual worth of the asset.
One of the qualities that makes valuing current assets at fair value rather than historical cost is the availability and reliability of current market price or fair value of current assets.
Answer:
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Explanation:
Answer:
a. FIFO - Inventory Used: $39900 Remaining Inventory: $14700
b. LIFO - Inventory Used: $41700 Remaining Inventory: $12900
c. Weighted Average Cost - Inventory Used: $40950 Remaining Inventory: $13650
Explanation:
Jan 01. Beginning inventory = 40 x $165 = $6600
Aug 13. Purchases 200 x $180 = $36000
Nov 30. Purchases 60 x $200 = $12000
Ending inventory = 75 units
Inventory Used = 300 – 75 = 225
(a) First-In-First-Out (FIFO)
This is the method where the inventory first received is the one that is used first. Common method when the inventory is perishable and would be wasted if left too long.
Inventory Used:
40 x $165 = $6600
185 x $180 = $33300
Total = $39900
Remaining Inventory:
15 x $180 = $2700
60 x $200 = $12000
Total = $14700
(b) Last-In-First-Out
Method whereby the inventory received latest is used first. Common in goods that are bulky. the inventory on top (latest purchased) is used first.
Inventory Used:
60 x $200 = $12000
165 x $180 = $29700
Total = $41700
Remaining Inventory:
40 x $165 = $6600
35 x $180 = $6300
Total = $12900
(c) Weighted Average Cost
This is whereby you divide the cost of goods sold by the number of units available for sale.
54,600 / 300 = $182
Inventory Used: 225 x $182 = $40950
Remaining inventory = 75 x $182 = $13650
Answer:
Depreciation for
2017 = $2,540
2018 = $10,160
Explanation:
Provided, Total cost of the machine = $77,980
Estimated salvage value = $6,860
Therefore, value to be depreciated = $77,980 - $6,860 = $71,120
Total life of asset = 7 years
Depreciation for the year 2017 = October to December = 3 months
Depreciation for the year 2018 = 
= $10,160
Under straight line method depreciation is fixed for each year, but in the given case in 2017 the asset is used only for 3 months, thus depreciation will be charged for 3 months only.
Final Answer
Depreciation for
2017 = $2,540
2018 = $10,160
Answer:
1) The government prohibits gas stations from selling gasoline for more than $3.40 per gallon.
This statement is an example of price ceiling as the gas stations cannot raise their price above $3.40 but can sell it at any price lower than the ceiling price of $3.40. This is binding
2) Due to new regulations, gas stations that would like to pay better wages in order to hire more workers are prohibited from doing so. This is neither a price ceiling or floor as government isn't directly affecting the price with their policy
3) The government has instituted a legal minimum price of $3.40 per gallon for gasoline. This is an example of price floor and is binding. The reason it is a price floor is because the petrol stations cannot charge a price below $3.40 but can charge any price above the floor price of $3.40
Explanation:
