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3 years ago

Which statement is true about the gross profit method of inventory valuation?

Business

1 answer:

Travka [436]3 years ago

6 0

Answer:

b. It may be used to estimate inventories for interim statements.

Explanation:

As we know that

Gross profit = Sales - the cost of goods sold

By doing the inventory valuation through the gross profit method, it estimated inventories for interim statements as these statements are covering the financial information that is less than a year so that the proper analysis could be made and in this, no auditing is required.

Therefore, for interim statements, the gross profit method is required.

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Smaller companies are moreLikely than larger companies to divide up tasks using a strategy

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Bigger companies are more known and have less space to mess up, as a smaller company not as known, are more likely to give up part of the company to other sharrers and i not played smart, could lose the company altogether.

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3 years ago

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In class, we discussed the differences between a contribution income statement versus the traditional approach (absorption whi

Irina-Kira [14]

B) Contribution margin

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3 years ago

A pharmaceutical company announces that it has received Food & Drug Administration (FDA) approval for a new allergy drug tha

Natali [406]

Answer:

b. The stock price will not change, because the market had already incorporated the information about the FDA approval announcement in the stock price.

Explanation:

If the markets are strong form efficient, it means the consensus of the market related to future impact of FDA approval on earnings would be correct, the stock price of today correctly estimates the future earnings, and therefore the stock price would not change when the earnings are released.

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2 years ago

The bond has a 12% annual coupon rate, a $1,000 par value, it matures in 15 years and pays coupon quarterly. The current bond pr

Vladimir79 [104]

Answer:

A. 14.28%

Explanation:

As per Approximation formula,

Quarterly yield = (A + B / C) * 100

A = Quarterly coupon = 12% of 1,000 / 4 =30

B = (Redemption - Price value / Number of coupon) = (1,000 - 900) / (15 * 4)

= 1.667

C= (Redemption value + Price / 2) = 1,000 + 900 / 2 = 1,900 /2 = 950

Quarterly yield = 30 + 1.66667 / 950 = 31.6667 / 950 = 0.03333

Quarterly yield = 3.33%

Using the calculator, we get exact Ytm quarterly = 3.3925%

Effective amount yield = {(1 + 0.033925)^4 - 1} * 100

Effective amount yield = 0.142762 * 100

Effective amount yield = 14.2762%

Effective amount yield = 14.28%

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3 years ago

M1 is comprised of currency held outside banks + traveler’s checks + __________.

leva [86]

<span>M1 is comprised of currency held outside banks + traveler’s checks + Checkable Deposits
Checkable deposits are a bank account which contain the amount of fund that you could use to write a check. In most cases, as long as the amount is sufficient, there is no restriction or limitation for this account</span>

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3 years ago