Answer:
There should not be any affect on accounting equation of Brooksa Landscaping.
Explanation:
To understand this concept we need to look at what actually is accounting equation is. Accounting equation is:
Assets = Liabilities + owners equity
So, if Brooks landscaping performs a service in May, it can recognize its revenue in month of May but instead of balancing it with cash it will be balance against trade debtors ( trade receivables). Therefore, the amount of assets will remain same even when payments are received in the month of June as it will be balanced out by crediting trade debtors and debiting cash. Hence, it can be seen that accounting equation remains unaffected due to this delay in actual payment.
Answer:
Business model
Explanation:
A business plan can be defined as a formally written document that comprises of the financial and operational objectives (plans) of a business firm.
Basically, a business plan is a roadmap or guide that outline the goals of a business, methods on how to achieve those goals, and the timeframe required to achieve those goals.
Similarly, a business model can be defined as a plan developed and implemented by a company while expressly promising value to its customers and converting the payments made by customers for goods or services into a profit.
Answer:
1. When searching for unrecorded liabilities, the auditors consider transactions recorded <u>after</u> year end.
<em>Auditors consider transactions recorded after year end to determine if it was supposed to be recorded in the current period. </em>
2. Accounts payable <u>confirmation</u> can be mailed to vendors from whom substantial purchases have been made.
<em>As a way to keep a document trail, creditors from whom substantial goods were bought from can be mailed a confirmation. </em>
3. To gain overall assurance as to the reasonableness of accounts payable, the auditor may consider <u>ratios</u>.
<em>Ratios such as the Payables turnover can be used to evaluate the reasonableness of Accounts payable. </em>
4. When auditors find unrecorded liabilities, before adjusting they must consider <u>materiality</u>.
<em>
They must consider if the adjustment is material or significant enough to record. </em>
5 Auditiors need to consider <u>shipping terms</u> terms for determining ownership and whether a liability should be recorded.
<em>Shipping terms need to be considered because they can tell who owns goods in transit and therefore if a liability is needed for them. Shipping terms such as FOB Shipping point mean that the business incurs the liability as soon as the seller ships the goods. </em>
Answer:
The answer is: 1) II > I > III
Explanation:
<u>Pricing scheme I: $2 million profit</u>
- Price $150,000
- Contribution margin = $150,000 - $50,000 = $100,000
- 35 units sold x $100,000 = $3.5 million
- profit = $3.5 million - $1.5M = $2 million
<u>Pricing scheme II: 2.25 million profit</u>
- Price $200,000
- Contribution margin = $200,000 - $50,000 = $150,000
- 25 units sold x $150,000 = $3.75 million
- profit = $3.75 million - $1.5M = $2.25 million
<u>Pricing scheme III: $1.5 million profit</u>
- Price $250,000
- Contribution margin = $250,000 - $50,000 = $200,000
- 15 units sold x $200,000 = $3 million
- profit = $3 million - $1.5M = $1.5 million