Answer: Option C - Assets are Overstated; No effects on liabilities: Equity is Overstated
Explanation:
When Bad debts are recorded, they will reduce the Accounts Receivable account because less money will be expected from debtors. Accounts Receivable is an asset account so it will be Overstated if bad debts are not recorded.
Equity will also be overstated because bad debts is an expense that is sent to the Income statement. If this expense is not deducted, the net income will be larger than it should be and when added to Equity it will overstate it.
Answer:
Direct Materials $ 14*20,000 = $ 28000
Direct Labor $ 14*1.9* 20,000 = $ 532,000
Variable Overhead $
14*1.9*1.2*20,000 = $ 638400
Fixed Overhead $
14*1.9*1.8*20,000 = $957600
Total Manufacturing Cost $ = 2156000
Less: Ending Inventory $ 107.8*730 = 78649
Cost of Goods Sold $2077306
Working:
Total Manufacturing Cost $ per unit = 2156000/ 20,000= 107.8 $
Ending Inventory $ 107.8*730 = 78649
Answer:
Cash $10,430 ; Cash equivalents $20,400
Explanation.
Cash consist of all currencies in hand or any convertible asset which can be converted to cash immediately.
It is to be noted that the assets with high liquidity will be included in cash and cash equivalent balance. They can quickly be converted to cash and would normally have 90 or lesser days to mature.
Solution.
$
Cash in bank. 8,540
Petty cash. 250
Check from customer. 1,350
Money order. 290
Cash. 10,430
The check has a very short maturity period since it will clear within 3-4 working days.
Money order can be cashed immediately .
Therefore;
Cash value is $10,430
For cash equivalent,
Cash equivalent = Money market fund balance + Treasury bills maturing in 60days
Cash equivalents = $10,400 + $10,000
=$20,400.
The amounts considered as cash and cash equivalents as of 31 December are ;
Cash $10,430 , $20,400 respectively.
Answer:
Because this is an inter-entity balance then the amount that should be eliminated of this debt is the letter D. all the $400,000.
Explanation:
Inter entity balance facilitates the management of allocations and transfers between entities. They provide a better control over transactions spanning multiple entities, other benefit is that the accuracy of the financial data improves and finally and this is why the anser is option D. is that it keeps each entity in balance
Answer:
1.267 = Overhead Rate
Explanation:
<em>As general approach,</em> the manufacturing rate, along with any rate is done by dividing the cost by a cost driver.
In this case teh cost is the manufacturing overhead and the cost driver the direct materials cost:
<em>Using Direct Materials cost, the rate would be:</em>
