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3 years ago

ABC, Inc. is a calendar-year corporation. Its financial statements for the years 2021 and 2020 contained errors as follows:

Business

1 answer:

Vesna [10]3 years ago

3 0

Answer: A) $15,000 overstated

Explanation:

Ending Inventory is subtracted from Cost of Goods sold so an overstated Ending Inventory would mean a smaller Cost of Goods sold and hence an overstated Income.

An Understated Depreciation amount would have the same effect because Depreciation is an expense so understating it would mean less expenses subtracted from Income leading to an overstated income.

As both of them will overstate income, the total overstatement would be;

= 9,000 + 6,000

= $15,000

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A process cost system would be used for all of the following products except computer chips. motion pictures. chemicals. soft dr

denpristay [2]

One thing that a process cost system cannot be used for from the given options is Motion pictures.

<h3>What is process costing?</h3>

This is a method of allocating cost that is based on the same item being mass-produced such that there is no discernable difference between the goods that were produced.

Motion pictures cannot be mass produced which is why they cannot use process costing, Every motion picture is unique and so something more specific is needed to apportion their cost.

Find out more on process costing at brainly.com/question/17129908

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5 0

2 years ago

Required information

Triss [41]

Answer:

1. Ending inventory = $3519

2. Cost of Goods Sold = $21030

3. Sales Revenue = $27279

4. Gross Profit = $6249

Explanation:

FIFO method of inventory valuation is whereby the stock that first comes into the business, leaves first. This is common in perishable inventory such as vegetables or fruits.

Jan 1. Beginning inventory: 53 units x $45 = $2385

Total

53 units x $45 = $2385

Apr 7. Purchase 133 units x $47 = $6251

Total

53 units x $45 = $2385

133 units x $47 = $6251

Jul 16. Purchase 203 units x $50 = $10150

Total

53 units x $45 = $2385

133 units x $47 = $6251

203 units x $50 = $10150

Oct 6. Purchase 113 units x $51 = $5763

53 units x $45 = $2385

133 units x $47 = $6251

203 units x $50 = $10150

113 units x $51 = $5763

1. Ending inventory = 502 - 433 = 69 hence,

69 units x $51 = $3519

2. Cost of Goods Sold =

[$2385 + $6251 + $10150 + (44 units x $51)] = $21030

OR $24549 - 3519 = $21030

3. Sales Revenue =

433 units x $63 = $27279

4. Gross Profit = Sales Revenue - Cost of Goods Sold hence,

$27279 - 21030 = $6249

4 0

3 years ago

The common stock of Auto Deliveries sells for $27.21 a share. The stock is expected to pay $1.80 per share next month when the a

DanielleElmas [232]

Answer:

Market rate of return on stock = 11.2152%

Explanation:

Details provided are

Market rate per share = $27.21

Dividend to be paid at year end = $1.80

Expected dividend growth rate = 4.6%

Expected return of market has to be calculated.

Using the dividend growth model we have,

$Price\ of\ share\ = \frac{Dividend\ at\ year\ end}{Market\ return\ - Growth\ rate}$

$27.21 = \frac{1.80}{Rm - 4.6}$

Market return - growth = $\frac{1.8}{27.21} = 6.6152$

Market return = 6.6152 + 4.6 = 11.2152%

Market rate of return on stock = 11.2152%

5 0

4 years ago

On December 31, 2020, the Bennett Company had 100,000 shares of common stock issued and outstanding. On July 1, 2021, the compan

matrenka [14]

Answer:

$5.31

Explanation:

Earnings per share = Earnings Attributable to Holders of Common Stock ÷ Weighted Average Number of Common Stocks Outstanding

<em>where,</em>

<u>Earnings Attributable to Holders of Common Stock is :</u>

Net Income $650,000

Less Preference Stock dividend ($71,000)

Earnings Attributable to Holders of Common Stock $579,000

<u>Weighted Average Number of Common Stocks Outstanding :</u>

Common Stocks at Beginning outstanding 100,000

Stocks Sold at Weighted Average (18,000 / 2) 9,000

Weighted Average Number of Common Stocks Outstanding 109,000

therefore,

Earnings per share = $579,000 ÷ 109,000

= $5.31

The 2021 basic earnings per share is $5.31.

4 0

3 years ago

Which of the following should be included in the acquisition cost of a piece of equipment?

topjm [15]

Answer: All of these choices are correct.

Explanation:

You didn't give the options to the question. The options include:

testing costs prior to placing the equipment into production

transportation costs

installation costs

All of these choices are correct.

Acquisition cost, is the total cost that is recognized by a company on its books for the purchase of an asset. These costs include the transportation cost, installation cost, shipping cost, testing costs, sales taxes, customs fees, etc.

Therefore, based on the explanation, the correct option is All of the choices are correct.

6 0

3 years ago