Best Tools, a manufacturing company, needs to cut costs to remain competitive. The manager of the company believes that the answ
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Answer:
31 Dec Expense A/c Dr. $5,400
To Prepaid Expense A/c $5,400
(Therefore, expense for the current financial year recorded)
Explanation:
We know that at the time of insurance paid in advance on 1 April for 2 years, entry was;
Prepaid Insurance A/c Dr. $14,400
To Cash A/c $14,400
Now at year end the expense relating to current period shall be recognized properly in the books, so that matching principle of revenue against expenses shall be matched.
Thus, period from 1 April to 31 December = 9 months
Expense for 9 months =
That means expense for the year = $5,400
Therefore, entry for such recording will be:
31 Dec Expense A/c Dr. $5,400
To Prepaid Expense A/c $5,400
(Therefore, expense for the current financial year recorded)
The correct statement is "Hockey sticks had their prices reduced by $0. 41 more than baseball bats."
Mark down refers to a reduction in price of an item or good. The reduction is generally done as a percentage of price of the item. The purpose behind mark down is to increase sales volume.
<h3>Calculation of reduction in price:</h3>Given:
Markdown in price of baseball bats is 42%
Cost of baseball bats after markdown is $21.46
Markdown in price of hockey sticks is 29%
Cost of hockey sticks after markdown is $39.05
For calculating the amount of markdown, we need to find the original cost of baseball bats and hockey sticks.
Calculation of cost of baseball bats before markdown:
Hence the markdown in price of baseball bats is
Similarly, for hockey sticks:
Markdown in the cost of hockey sticks is .
Difference in markdown is:
Therefore it can be concluded that markdown in cost of hockey sticks is more as compared to baseball bats by $0.41
Hence the correct statement is "Hockey sticks had their prices reduced by $0. 41 more than baseball bats."
Learn more about markdown here: