Answer:
a. Groupo sells goods to MTN for $1,000,000, payment due at delivery.
- transaction price = $1,000,000
- revenue recognized once the goods are delivered
No journal entry is required until goods are delivered and accepted.
b. Groupo sells goods on account to Grifols for $800,000, payment due in 30 days.
- transaction price = $800,000
- revenue recognized immediately since goods were already delivered
The journal entry:
Dr Accounts receivable 800,000
Cr Sales revenue 800,000
c. Groupo sells goods to Magnus for $500,000, payment due in two installments, the first installment payable in 18 months and the second payment due 6 months later. The present value of the future payments is $464,000.
- transaction price = $480,000
- revenue recognized immediately since goods were already delivered
The journal entry:
Dr Notes receivable 500,000
Cr Sales revenue 480,000
Cr Discount on notes receivable 20,000
Answer:
9,400 units
Explanation:
The breakeven point is the number of units that must be sold for the company to make neither a loss nor a profit. A target profit is the net of the sales less the sum of the fixed and variable expenses. The contribution margin is the difference between the sales and variable cost.
Sales per unit = $210,000/7000 = $30
Variable cost per unit = $136,500/7000 = $19.50
Let the number of units to be sold to achieve the profit target be x
30x - 19.5x - 67200 = 31500
10.5x = 98700
x = 98700/10.5
x = 9,400 units
Answer: 0.78 pound mark exchange rate
Explanation:
The Purchasing power parity (PPP) is typically used to make comparison between the currencies of different countries' currencies and also used in comparing their standards of living.
According to PPP, the pound-mark exchange rate in 2003 will be calculated as:
= 280/360
= 0.78
Answer and Explanation:
1. When there is high uncertainty in the market, there will be high yield spreads. This is because the higher the risk the higher the profit or compensation for risk
2.preferred stock positions pay more consistent dividends that common stock positions and also pay higher than bonds.
3.Accelerated depreciation is depreciation method in accounting that deducts higher depreciation expenses in the early life of an asset therefore leaving the company to pay less taxes on these assets and more cash flow. Increased cash flow consequently encourages and leads to more investment
Explanation:
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