Answer:
(B) outflow of $300,000
Explanation:
The change in net working capital of the Company A shall be determined through the following mentioned equation:
Change in net working capital=Percentage of sales in year 2-Percentage of sales in year 1
Change in net working capital=0.30*$2,000,000-0.30*$1,000,000
=$300,000 out flow
So based on the above calculations, the answer shall be (B) outflow of $300,000
Answer:
Due-diligence
Explanation:
Due diligence is the process of inspection by the venture capitalist to determine whether to invest in any company or not. In due diligence they gauge the potential of success of company and potential profitability. Due diligence process involves asking question to obtain important information to verification of feasibility of business opportunity. The question is primarily involved around date from financial reports, legal aspects, any intellectual property possess, the assets and liability of company.
Since given in question key claims of business plan is being verified, therefore due diligence process is being followed in venture capital funding
Answer:
True
Explanation:
Now the initial jounal entry of the Unearned Fees was recorded as:
Dr Cash received XX
Cr Unearned Fees XX ........... Is a liability
Now the reason why the statement is true can be best explained from the following equation:
Equity = Ordinary Stock + (Revenue - Expense - Dividend)
Now just look at the above equation and the journal entry, the unearned fees increased the liability and if this amount is not waived off to the amount the unearned fees are converted to earnings, I mean if you have received the amount for 3 months services in advance and only one month services are delivered then the 1/3 part of the unearned fees will recognized as earned. If it is not complied then we can see in the above equation that the revenue would decrease and this decrease will decrease the equity.
Answer:
Estimated manufacturing overhead rate= $18 per direct labor hour
Explanation:
Giving the following information:
Estimated manufacturing overhead for the year $ 37,080
Estimated direct labor hours for the year 2,060
To calculate the estimated manufacturing overhead rate we need to use the following formula:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Estimated manufacturing overhead rate= 37,080/2,060
Estimated manufacturing overhead rate= $18 per direct labor hour
An externality in business or economics is where an industrial activity has an unexpected side effect which does not figure in the cost of the goods and services involved. For example, I worked many years at a large mine. Just the existence of the mine there meant it was a no-hunting area so a side effect was that the moose used it as a refuge during hunting season which as a side effect was beneficial to the moose (and deer). Another example is that we used to crush mine rock for the haulroads for winter traction. As a result, it was found that the fines from this were concentrated with copper values so were put in the mill for processing-an unexpected outcome.
