Answer:
(a) The cost in dollars of all the main-floor seats that were sold: 42m + 25b. (b) The total number of seats that were sold for the performance: m+b.
Explanation:
Its understood that 1 tickect is equal to 1 seat, therefore the number of seats = number of tickets regardless of the type of seat. With this assumption, the algebraic expressions can be done.
Answer:
b) inventory is sold on credit.
Explanation:
Liquidity is defined as the a business to use its current assets to settle it's current liabilities.
This is calculated by using the working capital ratio.
Working capital ratio = Current assets ÷ Current liabilities.
Cash and inventory contribute to a business' liquidity.
When inventory is sold on credit, it does not result in immediate increase in cash as payment is in the future. So there is a reduction in the current asset of the company.
A reduction in the numerator of the working capital ratio results in lower value of the ratio (lower liquidity)
Answer: • provide a permanent record for the cost of goods sold account
• monitor costs incurred to date and to predict and control costs for each job.
• provide a subsidiary ledger for the finished goods inventory account.
Explanation:
Job cost sheet refers to the document that is used for the recording of the manufacturing costs and it is used as a subsidiary ledger for the work in process account due to the fact that it contains every details about the job in process.
From the options given, the job cost sheets can be used to:
• provide a permanent record for the cost of goods sold account
• monitor costs incurred to date and to predict and control costs for each job.
• provide a subsidiary ledger for the finished goods inventory account.
Answer:
Part 1.
3.1 times
Part 2.
a. total assets
Part 3
d. the company's ability to generate sufficient cash to repay debt when due.
Explanation:
<u>For Part 1</u>
Inventory turnover measures the activity of liquidity of a company`s inventory. The higher the ratio in comparison, the more efficient the inventory is managed.
<em>Inventory turnover = Cost of Sales ÷ Inventory</em>
therefore,
Inventory turnover = $982,500 ÷ $ 312,500 = 3.1 times
<u>For Part 2</u>
In a common-size Balance Sheet, each item is expressed as a percentage of total assets whereas in a common size Income Statement, Sales revenue is expressed as 100 % and every other item is expressed as a percentage of sales revenue.
<u>For Part 3</u>
Solvency or Liquidity is the ability of short term assets to cover short term liabilities. Also put, it is the company's ability to generate sufficient cash to repay debt when due.
Answer:
The first journal entry was not the most appropriate, but since the mistake was correctly adjusted at the end of the year, both assets and expenses will be the same whether they did it correctly the first time or they had to adjust a mistake at the end of the year.
E.g. something like this happened
October 1, rent expense for 1 year
Dr Rent expense 12,000
Cr Cash 12,000
December 31, adjustment to rent expense
Dr Prepaid rent 10,000
Cr Rent expense 10,000
they should have recorded it as:
October 1, prepaid rent for 1 year
Dr Prepaid rent 12,000
Cr Cash 12,000
December 31, adjustment to rent expense
Dr Rent expense 2,000
Cr Prepaid rent 2,000
Whichever way you recorded the transactions, the balances a the end of the year would be:
prepaid rent (asset) $10,000
rent expense (expense) $2,000
