Answer:
debit Accounts Receivable $350 and credit Unearned Service Revenue $350
Explanation:
The bookkeeper incorrectly made the following journal entry:
Dr Cash 350
Cr Accounts receivable 350
The correct entry should have been:
Dr Cash 350
Cr Unearned revenue 350
So the adjusting entry should be:
Dr Accounts receivable 350
Cr Unearned revenue 350
Answer:
see explaination
Explanation:
1. A low-quality producer will not provide any warranty, because he knows there will be more warranty claims.
He will choose option B.
Example:
Option B:
Toaster sell 100
Price $10
Sales = $1000
Profit = $100 (let's say it costs him $9 to make it).
Toaster sell 35 (as 5 times high price).
Price $49
Sales = $1725
Warranty Expense (let's say, due to multiple times claims) = $1500
Profit = -$90 (let's say it costs him $9 to make it).
2. A high-quality producer will provide any warranty because he knows there will be very very few warranty claims.
He will choose option B.
3. Yes, the act of offering free warranty will go a long way in conveying a positive signal to customers that the brand is providing quality product & it trusts its product.
Answer:
It is cheaper to make the part. In three years the company will save $12,000.
Explanation:
Giving the following information:
Units= 40,000
Variable costs= $1.60 per unit
Fixed costs= $40,000 per year
Gilberto is considering buying the part from a supplier for a quoted price of $2.70 per unit guaranteed for three years.
We need to calculate the total cost of making and buying the part.
Make in-house:
Total cost= 1.6*40,000 + 40,000= $104,000
Buy:
Total cost= 40,000*2.7= $108,000
It is cheaper to make the part. In three years the company will save $12,000.
Answer:
$64,000
Explanation:
In order to be deductible, a business expense must be both ordinary and necessary. Being ordinary means that it is a plausible expense for this business, since the expense in question is related to accounting services, it is ordinary. Being necessary means that the expense is the minimum required and is appropriate and helpful to the business. In this case, all of the expense was not required, therefore, only $64,000 (the reasonable market value for the services provided) are deductible.
