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prohojiy [21]
2 years ago
5

Accrued salaries payable of $100000 were not recorded on December 31, 2017. Office supplies on hand of $57000 on December 31, 20

18, were erroneously treated as an expense instead of supplies inventory. Neither of these errors was discovered nor corrected. The effect of these two errors would cause
Business
1 answer:
Dennis_Churaev [7]2 years ago
7 0

Answer:

In 2017

Net Income and Retained Earning are overstated by $100,000

Expenses and Payables are understated by $100,000.

In 2018

Inventory, Net Income and Retained Earning are understated by $57,000

Expenses are overstates by $57,000

Explanation:

Accrued Salaries is Recorded as follow

Dr. Salaries Expense

Cr. Salaries Payament

Non recording of this entry will result in understatement of Expenses and Payables by $100,000 over statement of Net income and retained earning by the same amount.

Treatment of Office supplies of $57,000 as expense will overstate the expenses  and understate the the inventory, Net income and Retained Earning.

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However, the debt issues also raises the probability of bankruptcy. You company has a 30% chance of going bankrupt after 3 years
Otrada [13]

Answer:

Expected Cost = $60,000

Present Value of Expected Cost = $45,079

Explanation:

The chance that the bankruptcy will happen is 30% and the cost it will incur if it happens is $200,000. The expected cost is the probability of the event happening multiplied by the cost of the event happening.

Expected Cost = 200,000 * 0.3

= $60,000

The present value of this cost assuming a discount rate of 10% is;

= \frac{60,000}{(1 + 0.10)^{3} }

= $45,078.89

= $45,079

8 0
2 years ago
If the team leader learns that organizational superiors are unaware of the team’s successes, the leader might initiate an "FYI"
ad-work [718]

Answer:

Advocating

Explanation:

The team leader needs to advocate and represent the team to their organizational superiors (upper management). Sometimes large organizations are too complex and BIG, and lower management has to find a way to make themselves be noticed. For example, he could start writing a newsletter, etc.

8 0
2 years ago
Outose Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the produ
True [87]

Answer:

C) $25,177

Explanation:

Spoiled units = (22,300 units + 76,400) - (72,900 units + 19,000)

=$98,700units -$91,900 units

= 6800 units

Normal spoilage = 5% × 72,900 units

= 3,645 spoiled units

Abnormal spoilage = 6800 units - 3645 units

= 3,155 units

Direct Materials ,Conversion Costs

WIP, beginning inventory$156,000$77,200

Costs added

during period 224,400 299,000

Total cost to account for 380,400 376,200

Divide by equivalent units*98,700 91,100

Equivalent-unit costs $3.85 $4.13

Equivalent unit

Direct Materials: 22,300 + 76,400 = 98,700 units

Conversion Costs: 72,900 + (19,000 x 60%) + 6800 = 91,100 units

Total cost per equivalent unit = $3.85 + $4.13 = $7.98

3155 units × $7.98 = $25,177

Therefore the cost allocated to abnormal spoilage using the weighted-average process-costing method will be $25,177

4 0
2 years ago
In which type of economy would both private businesses and the government influence the factors of production, and why
pashok25 [27]

A mixed economy is where both private businesses and the government influence the factors of production.

3 0
2 years ago
XYZ Company has expected earnings of $3.00 for next year and usually retains 40 percent for future growth. Its dividends are exp
Verizon [17]

Answer:

Price of stock  = $40

Explanation:

According to the dividend growth model, the price of a stock is the present value of expected dividend discounted at the required rate of return.

This is done as follows:

Price of a stock = D×(1+r)/(r-g)

D(1+g) - Dividend for next year = 100%-40%× $3 = $1.8

g- growth rate - 10%

r- required rate of return - 15%

Price of stock = 1.8× (1.1)/(0.15-0.1)

                    = $40

6 0
3 years ago
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