Answer:
B. causing the interest expense to be lower than the bond interest paid
Explanation:
Answer:
Dr Retained earnings $14,000
Cr Inventory $14,000
Explanation:
There is a need to make adjustment to the inventory . Therefore,
Adjusted inventory
= New method of $171,000 - Old method of $185,000
= $14,000 decrease
It is to be noted that a lower inventory will have high costs associated with goods sold hence reduces profit/net income for the previous year by $14,000.
Also, the net income reports to retained earnings account hence decreases retained earnings.
Having made the above adjustment, we can assume that the average cost method was used for 2020 books.
Answer: The correct answer is "c) planned orders of the parent".
Explanation: The gross requirements of a given component part are determined from <u>planned orders of the parent</u>
Without the release of planned orders from immediate parents, the gross requirements of a given component part could not be determined.
Lender
which is usually the bank
