factors that are used to make goods and services letter a
Answer:
Part a
Debit : Accounts Receivable - Vargas Co. $148,600
Debit : Cost of Sales $89,160
Credit : Sales Revenue $148,600
Credit : Merchandise $89,160
Part b
Debit : Freight Expenses $2,100
Credit : Cash $2,100
Part c
Debit : Cash $133,740
Debit : Discount allowed $14,860
Credit : Accounts Receivable - Vargas Co. $148,600
Explanation:
A corresponding cost of sales must be recorded each time a sale is made. The freight costs are company costs for Sievert Co. and will be expensed in the income statement.
The payment due is at 90 % after the discount of 10% given that the payment is made within the credit term of 30 days.
Answer:
C. LIFO liquidation
Explanation:
Benson Company uses the LIFO inventory costing method for both its tax reporting purposes and its financial reporting purposes. In its footnotes, Benson Company is required to report the amount at which inventories would have been reported under FIFO method.
The difference between these two numbers is commonly referred to as LIFO Reserve.
LIFO reserve represents the difference in ending inventory using LIFO and ending inventory if FIFO were employed instead.
Third option is the correct option.
LIFO reserve = FIFO inventory cost - LIFO inventory cost
FIFO inventory cost = LIFO inventory cost + LIFO reserve
Current members will pay more per month.
The quantity demanded for memberships will decrease.
The owner will make more money.
