Option B, The predetermined overhead allocation rate is based on actual costs.
Explanation:
The term "pre-set overall rate" refers to the allocation rate at the outset of a project, which is based on the expected cost of overhead output for a certain reporting period.
This rate is often used to make book closure quicker as it eliminates estimation of real overhead costs as part of the closing process at the end of the period. Nevertheless, at least at the end of every fiscal year, the disparity between the real and expected overhead sums must be reconciled.
The predetermined rate is derived by calculation as follows:
Estimated amount of manufacturing overhead to be incurred in the period ÷ Estimated allocation base for the period
Answer:
Account titles and explanation Debit Credit
bad debt expense $16,800
allowance for d
doubtful account $16,800
Explanation:
Aging of accounts =5% of accounts receivable
Which is 360,000 x 5% = 18,000 expected allowance
current balance before adjustment =1,200 credit
Adjustment = 18,000 - 1,200 = 16,800
Adjusting entry BY Tanning Company
Account titles and explanation Debit Credit
bad debt expense $16,800
allowance for d
doubtful account $16,800
Answer:
$1,050,000
Explanation:
Calculation to determine what the company should report as a liability for unredeemed coupons
Liability for unredeemed coupons =($800,000 x 0.70 ) - $350,000 ) x $5.00
Liability for unredeemed coupons=($560,000-$350,000)×$5.00
Liability for unredeemed coupons=$210,000x $5.00
Liability for unredeemed coupons=$1,050,000
Therefore At December 31, 2021, the company should report a liability for unredeemed coupons of:$1,050,000
Answer:
B) $3,000
Explanation:
Since Laura acquired this property (stocks) by gift, her basis for loss will be $3,000 which is equal to the fair market value at the time she received the gift. If she had made a gain with this transaction, her basis for gain would have been the $4,000 of her father's basis.
