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olga nikolaevna [1]
3 years ago
9

Based on the data below, how would the inventory appear on the balance sheet, assuming that the lower of cost or market is used

and the cost is determined by the First-in, first-out (FIFO) method?
Total cost: $248,000
Total market: $252,350
Lower-of-cost-or-market (LCM): $239,350
The inventory would appear in the current assets section, as follows:
Inventory-at cost (first-in, first-out method) X
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Check My Work
Remember that inventory is an asset account. The method of determining the cost of the inventory and the method of valuing the inventory is also reported
Learning Objective 6
Business
1 answer:
Mashcka [7]3 years ago
8 0

Answer:

On the balance sheet, the inventory would appear as:

Inventory $248,000

Explanation:

In the notes to the accounts, the method of determining the cost and the method of valuing the inventory would be disclosed.  It is not disclosed on the balance sheet, but on the notes to the accounts.

It would make the balance sheet appear unorganized to include details that should have been included in the notes.  The presentation of information is very important in order to ensure that those reading the information understand it.  Understanding is not aided by including information that could be displayed elsewhere.

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Company A has a beta of 0.70, while Company B's beta is 1.45. The required return on the stock market is 11.00%, and the risk-fr
stira [4]

Answer:

company B's cost of equity is 14.0375% - 8.975% = 5.0625% higher than company A's cost of equity

Explanation:

cost of equity = risk free rate + (beta x market premium)

risk free rate = 4.25%

market premium = market return - risk free rate = 11% - 4.25% = 6.75%

Company A's cost of equity = 4.25% + (0.7 x 6.75%) = 8.975%

Company B's cost of equity = 4.25% x (1.45 x 6.75%) = 14.0375%

this means that company B's cost of equity is 14.0375% - 8.975% = 5.0625% higher than company A's cost of equity.

8 0
2 years ago
Lauren is the owner of a bakery that earns 0 (zero) economic profit. Last year, her total revenue was $145,000, her rent was $12
kow [346]

Answer: The correct answer is " a. $92,000.".

Explanation: The explicit costs are observable, that is, those that we can easily take into account and decrease our operating result (salaries paid to employees, material costs, taxes, etc.)

So her total explicit cost were: $12 000 + $65 000 + $15 000 = $92 000.

6 0
3 years ago
Exodus Limousine Company has $1,000 par value bonds outstanding at 15 percent interest. The bonds will mature in 30 years. Compu
nasty-shy [4]

Answer:

if YTM at 4% price :  $2,902.1237

if YTM at 8% price :  $1,788.0448

The bonds are above face value asthey offer a higher coupon payment than the market yield therefore the bond holders are willing to pay above theri face value

Explanation:

the market price of the bond will be the present value of coupo payment and maturity:

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 150.000

time 30

rate 0.04

150 \times \frac{1-(1+0.04)^{-30} }{0.04} = PV\\

PV $2,593.8050

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity   1,000.00

time   30.00

rate  0.04

\frac{1000}{(1 + 0.04)^{30} } = PV  

PV   308.32

PV c $2,593.8050

PV m  $308.3187

Total $2,902.1237

No we repeat the process with the yield at 8%

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 150.000

time 30

rate 0.08

150 \times \frac{1-(1+0.08)^{-30} }{0.08} = PV\\

PV $1,688.6675

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity   1,000.00

time   30.00

rate  0.08

\frac{1000}{(1 + 0.08)^{30} } = PV  

PV   99.38

PV c $1,688.6675

PV m  $99.3773

Total $1,788.0448

7 0
3 years ago
An upcoming convention has secured 300 rooms at $140 per room for Friday night. The rack rate for Friday night is $250 per room
m_a_m_a [10]

Answer:

$67,000

Explanation:

The total revenue will be income from the 300 rooms and that from 100 rooms

=(300 x $140) + ($100 x 250)

=$42,000 +$25,000

=$67,000

6 0
3 years ago
Charlie's brother, Alexander, also consumes apples (A) and bananas (B). Alexander's utility function happens to be U(A, B) = 5A
Andrei [34K]

Solution :

U(A, B) = 5A + 2B

a). Bundles (40, 5) = U ( _____ , 2), lie on the same indifference curve. Suppose missing numbers is x.

So, U(40, 5) = U(x, 2)

   (40 x 5) + (2 x 5) = 50x + (2 x 2)

     210 - 4  = 5x

       x = 41.2

So Alexander has 40 apples and 5 bananas. The indifference curve though (40, 5) also include bundle.

Therefore, (41.2, 2)

b). $MRS_{BA} = \frac{MU_B}{MU_A}$

                  $=\frac{\delta U/\delta B}{\delta U/\delta A}$

                  $=\frac{2}{5}$

                 = 0.4

So Alexander  has 40 apples and 5 bananas with this bundle. Alexander would like to give up 0.4 unit apples for a banana.

7 0
2 years ago
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