1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
il63 [147K]
3 years ago
11

"Tiberend, Inc., sold $150,000 in inventory to Schilling Company during 2017 for $225,000. Schilling resold $105,000 of this mer

chandise in 2017 with the remainder to be disposed of during 2018. Assuming that Tiberend owns 25 percent of Schilling and applies the equity method, what journal entry is recorded at the end of 2017 to defer the intra-entity gross profit
Business
2 answers:
Mkey [24]3 years ago
7 0

Answer:

$9900

Explanation:

Given:

  • Inventory value $150,000
  • Revenue: $225,000
  • Schilling resold: $105,000
  • Tiberend owns 25 percent

We need to find the gross profit and its ratio.

The gross profit = Revenue - Inventory value

= $225,000 - $150,000 = $75,000

The gross profit ratio = \frac{Gross profit}{Revenue} = \frac{75,000}{225,000} = \frac{1}{3} = 33.33%

Ending inventory with schilling resold

= Revenue - schilling resold

=  $225,000 - $105,000 = $120,000

Total unrealized profit: $120,000*25% = $30,000

So, Intra entity unrealized gross profit is  

= Total unrealized profit × Tiberend ownership  intra entity unrealized gross profit is

= $30,000  × 33%

= $9900

Hope it will find you well.

BlackZzzverrR [31]3 years ago
7 0

Answer:

Gross profit =    = 33.33%

Unrealized gross profit = $10,000

Explanation:

Given data:

Selling price of inventory = 225,000

Cost price of inventory = 150, 000

Inventory sold to other company = $105,000

To prepare the journal entry, the following is calculated

(a) Gross profit percentage:

Gross profit percentage is calculated using the formula

Gross profit = (selling price of inventory - cost price of inventory)/selling price of inventory * 100

Gross profit = {(225,000 - 150,000)/225,000] * 100

                    = (75,000/225,000) * 100

                   = 0.3333 * 100

                   = 33.33%

(b) Unrealized gross profit:

The unrealized gross profit is calculated using the formula;

Unrealized gross profit =

(Inventory sold to S -Inventory sold to others) * gross profit * shares own

Substituting, we have

Unrealized gross profit =  (225,000 - 105,000)  * 33.33% * 25%

                                       =120,000 * 33.33% * 25%

                                       = 120,000 * 0.3333 * 0.25

                                       = $10,000 (approximately)

The journal entry is given as;

Date                    Description                                Debit                    Credit

2017                   Income from investment           $10,000

                         Investment in S company                                     $10,000

                (To record the unrealized gross profit)

You might be interested in
On January 1, the first day of the fiscal year, a company issues a $7,500,000, 8%, five-year bond that pays semiannual interest
Nana76 [90]

Answer and Explanation:

The journal entries are shown below:

1. Cash  Dr  $7,811,873  

  To Bonds payable    $7,500,000

  To Premium on bonds Payable  $311,873  

(Being the bond payable is recorded)

For recording this we debited the cash as it increased the assets and credited the bond payable & premium as it also increased the liabilities

2. Interest expenses $268,812.7  

Premium on Bonds payable  $31,187.3   ($311,873 ÷ 10 years)

   To Cash   $300,000

(being cash paid is recorded)

For recording this we debited the interest expense and premium as it increased the expenses and credited the cash as it decreased the assets

5 0
3 years ago
Item 29Item 29The Creamery is analyzing a project with expected sales of 5,700 units, ±5 percent. The expected variable cost per
GREYUIT [131]

Answer:

$467,023

Explanation:

The operating cash flow is shown below:

= EBIT + Depreciation - Income tax expense

where,  

EBIT = (Selling price per unit - variable cost per unit) × number of units - fixed cost

= ($339 - $168) × 5,700 units - $425,000

= $549,700

Income tax expense = (Selling price per unit - variable cost per unit) × number of units - fixed cost × tax rate

=  ($339 - $168) × 5,700 units - $425,000 × 0.21

= $115,437

And, the depreciation expense would be

= Depreciation expense ×  tax rate

= $156,000 ×  0.21

= $32,760

Now put these values to the above formula  

So, the value would equal to

= $549,700 + $32,760 - $115,437

= $467,023

8 0
3 years ago
Rogers Company reported net income of $49,646 for the year. During the year, accounts receivable increased by $6,774, accounts p
Greeley [361]

Answer:

Cash flow from operations= $105,603

Explanation:

Cash flow from operating activities is the cash inflow and outflow from normal business activities during a specified period.

The formula is given as

Cash flow from operations= Net income + Depreciation and amortization + Adjustment to net income+ Changes in account receivable+ Changes in inventory+ Changes in other operating activities.

Cash flow from operations= 49,646+ 6,774- 2,909+ 52,092

Cash flow from operations= $105,603

6 0
3 years ago
Requirement 1. Match each function with its representative cost driver. Function Representative Cost Driver 1. Accounts payable
bixtya [17]

Answer:

production

Explanation:

the production is the highest of all the more afterall

3 0
3 years ago
With practical illustration, discuss how managers can leverage on organizational behaviour components to maximize business succe
Nastasia [14]

Answer:  

Within every organisation that is made up of humans, people are usually placed in groups and units. Because these units collectively make up the organisation, it is important to understand how people behave when they are placed in them. The study of the above is referred to as Organisational Behaviour.  

When discussing Organisational Behavior, one has to look at the following:  

1. People: Every organisation needs the right people to survive. It needs strong leadership and competent people who are culture fit with the ability to key into the vision, mission and objectives of the organisation and run with it with minimal supervision.  

Practically speaking, let's assume Tendon LLC is a start-up, the culture of the organisation will most likely reflect the values, habits and tendencies of the CEO. If the CEO values partnerships, integrity, quality, he'd lookout for those qualities in the heads of departments who he'd hire to manage units within the organisation. Those, in turn, will do the same. The extent to which such values are implemented will determine the success of the organisation, to a large extent.  

<em>Leadership:</em> Companies that can develop leaders the fastest will eventually win in the market place. For the sake of this explanation, let's say Leadership is the ability to influence others towards the attainment of organisational goals which are ethical and profitable and to make them love doing it.  

Strong and quality leadership prevents high attrition rates and ensure cohesion within teams. If Tendon LLC, for instance, enters the market with a stronger team that Reflex LLC who has been in the business for 15 years, the probability that Tendon will kick Reflex out of the market is high. One of the attributes of leaders are they groom other leaders quickly, they share information rather than hoard them, as they share what they know, they learn more and have more to share thus there is a free and increasing flow of knowledge.  

Other attributes of good leadership are accountability and ownership mentality. Leaders don't own the business but they show up every day like they own it and put in the work like they would if they own it. Contrast the above with Reflex who has staff that only show up to work because they have to and do only the bit they are required to.  

2. Structure: This simply refers to the various formal relationships that have been created within the organisation for the effective working of the same. For example, there is the Accounting Unit, Human Resources Unit, Marketing Unit, Customer Care Unit, Board of Directors, Executive Management etc.  

The relationship between each of these units/ roles servers to clarify reporting structures thus removing any ambiguity with the contractual, political and power relationships between the organisation.  

3. Technology: Technology in some industries has replaced a lot of jobs. The purpose of technology is to make life and work simpler, easier. However, in certain industries, for instance, robots have taken over the jobs of millions of people. This simply means that the future of organisations cannot exist without technology. Looking at it from the entrepreneur’s perspective, it is cheaper in the long run to have robots. Robots don't take sick and maternity leaves, come late to work or feel bad. They simply get the job done. This means more profit in the long run.

4. Social System:  

Where ever there is a group of people, organised towards a common goal, a social system is most likely to emerge. The values, attributes, personality and thinking of the leaders in any organisation will always influence its social system/ culture. Just like it is important to form healthy habits as an individual, an organisation must form social systems that are healthy and critical to the attainment of its organisational objectives.  

Automattic Inc --an American company-- for instance, has successfully codified its social system such that as employees are coming on board, this is communicated to them and they sign off on it. Thus, it becomes like a social contract which will guide their behavior during their stay there.  

5. Environment  

Every organisation must take into cognisance its internal and external environments. If the external environment is conducive for business, then there is one less factor to worry about. If however, just like in recent times, workers cannot come physically to work due to a pandemic, the behaviour of the organisation is altered. If they do not quickly adjust their operations to accommodate this new behaviour, it will translate to the loss of man-hours, loss of value to customers, loss of customers and ultimately an erosion of the bottom line of the business.  So is the internal environment. The internal environment must be conducive for employees to work. The environment must be such that encourages and elicits creativity, problem-solving, teamwork and cohesion.  

Cheers!  

3 0
4 years ago
Other questions:
  • When managing processes, it is vital that:
    6·1 answer
  • Why are prestige products often an exception to the law of demand?
    7·1 answer
  • SpeakEasy, a U.S. software company that specializes in voice-recognition software, wishes to rapidly enter the growing technical
    6·1 answer
  • How strong are the competitive forces confronting under armour, nike, and the adidas group? do a five-forces analysis to support
    10·1 answer
  • On January 1, Year 5, customers owed Eagle $40,000. On December 31, Year 5, customers owed Eagle $30,000. Eagle uses the direct
    5·1 answer
  • The Plastics Division of Weston Company manufactures plastic molds and then sells them for $70 per unit. Its variable cost is $3
    9·1 answer
  • Competitive advantage refers to:
    11·1 answer
  • Consider the following: Lumber Revenues, $120,000; Hardware Revenues, $90,000; Cost of Sales, $130,000; All other costs and expe
    14·1 answer
  • One strength of the team leadership model is ______. a. its complexity b. its application to real-life organizations c. changes
    7·1 answer
  • You see a pair of jeans on sale for 10% off the regular price of $50. You have a credit card with a 13% interest
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!