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zloy xaker [14]
3 years ago
15

On May 1, Anders Company purchased merchandise in the amount of $5,800 from Shilling, with credit terms of 2/10, n/30. Anders us

es the perpetual inventory system and the gross method. The journal entry or entries that Anders will make on May 1 is:a. Sales 5,800 Accounts receivable 5,800 b. Merchandise Inventory 5,800 Accounts payable 5,800 c. Accounts payable 5,800 Sales 5,800 d. Merchandise Inventory 5,800 Cash 5,800
Business
1 answer:
Lera25 [3.4K]3 years ago
4 0

Answer:

Option (b) is correct.

Explanation:

Given that

Amount of merchandise purchased = $5,800

Credit terms = 2/10 and n/10

Using a perpetual system and gross method,

Therefore, the Journal entry is as follows:

On May 1,

Merchandise inventory A/c Dr. $5,800

            To accounts payable                 $5,800

(To record the purchase of merchandise on account at May 1)

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Economic profit = Revenue - Explicit cost - Implicit Cost

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Answer:

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Current year cost: $ 37,850        Current year machine hours: 19,100

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Variable cost per machine hour = <u>Current year cost - Prior year cost</u>

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Variable cost per machine hour: <u>37,850 - 33,300</u> = $1.30 per machine hour

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Variable cost current year: ($1.30 * 19,100) = $24,830

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