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Anna007 [38]
2 years ago
13

At the end of a reporting period, a company determines that its ending inventory has a cost of $300,000 and a net realizable val

ue of $230,000. What would be the effect(s) of the adjustment to write down inventory to net realizable value?
Business
1 answer:
Maksim231197 [3]2 years ago
7 0

Answer:

1.Cost of Goods Sold Increase by $70,000

2.Gross Profit and Net Profit decrease by $70,000

3.Inventory in balance sheet decrease by $70,000

Explanation:

IAS 2 requires inventory to be measured at the lower of cost or net realizable value.

In our case the inventory will be valued at net realizable value of $230,000 because this is lower.

The effect with this is :

1.Cost of Goods Sold Increase by $70,000

2.Gross Profit and Net Profit decrease by $70,000

3.Inventory in balance sheet decrease by $70,000

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Exercise 8-7 At December 31, 2018, Concord Corporation Company had a credit balance of $18,800 in Allowance for Doubtful Account
Marina86 [1]

Answer:

Dr Allowance $13,500

Cr Accounts Recivable $13,500

Dr Accounts Recivable $3,500

Cr Allow ance $3,500

Dr Cash $3,500

Cr Accounts Rec $3,500

Dr Bad Debts Expense $21,900

Cr Allowance $21,900

Explanation:

Preparation of the journal entries to record the 2019 transactions of Concord Corporation Company

Dr Allowance $13,500

Cr Accounts Recivable $13,500

(To record amount written off)

Dr Accounts Recivable $3,500

Cr Allow ance $3,500

(To reverse write-off)

Dr Cash $3,500

Cr Accounts Rec $3,500

(To record collection of writeoff)

Dr Bad Debts Expense $21,900

Cr Allowance $21,900

[$30,700-($18,800-$13,500+$3,500)]

8 0
2 years ago
What is a federal and/or state tax on specific goods like gasoline, tires, airfare, or cigarettes?
amm1812
An excise tax is a <span>federal and/or state tax on specific goods like gasoline, tires, airfare, or cigarettes. Excise taxes are most always included in the price of the product.</span>
8 0
3 years ago
Read 2 more answers
The Jones family has a disposable income of $90,000 annually. Assume that their marginal propensity to consume is 0.8 (the Jones
oksian1 [2.3K]
The Jones Family has an annual consumer spending of $82,000. This is calculated using this formula: C = A +MD where C is the consumer spending, A is the autonomous consumption spending, M is the marginal propensity to consume, and D is the disposable income. Thus, the calculation is C = $10,000 + (0.8)($90,000). Giving C a value of $82,000.
6 0
3 years ago
Jessica who owns a restaurant in New York City and is generating handsome profit from the business, has decided to take a portio
lara [203]

Answer:

Financialisation

Explanation:

Financialisation is about changes in the actual conduct and meaning of work .

5 0
3 years ago
For each activity, select the impact on the accounting equation. After doing all transactions, ensure that the accounting equati
AlladinOne [14]

Answer:

Impact of Transactions on the Accounting Equation:

Transaction                       Assets = Liabilities + Stockholders' Equity

1.                                        15,000 =   0                       15,000

2.                                        9,000 =   9,000                 0

3.                                         1,200 =    1,200                 0

4.                                        2,400 =   2,400                 0

5.                        -12,000+12,000 =  0                         0

6.                                        3,000 =  0                         3,000

7.                                       -4,000 =  -4,000                 0

8.                                      -2,400 =  -2,400                  0

9.                                              0 =   -1,200                  1,200

10.                                    -1,000 =    0                        -1,000

Totals                          $23,200 = $5,000             $18,200

Explanation:

a) Data and Analysis:

1. Cash, $15,000 Common Stock

2. Cash $9,000 Bank Loan $9,000

3. Cash $1,200 Deferred Revenue $1,200

4. Supplies $2,400 Accounts Payable $2,400

5. Prepaid Rent $12,000 Cash $12,000

6. Accounts Receivable $3,000 Service Revenue $3,000

7. Bank Loan $4,000 Cash $4,000

8. Accounts Payable $2,400 Cash $2,400

9. Deferred Revenue $1,200 Service Revenue $1,200

10. Dividends $1,000 Cash $1,000

7 0
3 years ago
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