Answer:
The solution to the given problem is given below.
Explanation:
1. Do you believe that the company needs outside financing?
Yes, Company needs outside finance total $ 40,000 as $25,000 in month of Feb and $15,000 in month of Apr
il.
2. What is the minimum line of credit to request from a lender?
Minimum line of credit needed is $40,000
3. Do you think you are a good candidate for the line of credit? Why?
Yes, we are good candidate for line of credit because we can start repayment by May and repay by July and after repayment we will have ending March Cash balance $100,000
.
Detailed calculations are attached with the image.
Answer:
Lahdekorpi OY, a Finnish corporation and Three-O Company, a subsidiary incorporated in the United States
Transfer Pricing:
a) The best transfer pricing method in this case is the cost plus method. This gives the transfer price as Cost + 50%.
b) The appropriate transfer price should be $3 ($2 x 1.5).
Explanation:
Transfer pricing arises when controlled entities set prices for exchange of goods and services. When Lahdekorpi OY, a Finnish corporation, sells wooden puzzles to Three-O Company, given their relationship, transfer pricing has arisen. It is the assignment of cost for goods and services exchanged between related parties, like a parent and a subsidiary.
There are many Transfer Pricing methods which entities and the taxing authorities can use to determine the best transfer price. According to the Organisation for Economic Co-operation and Development (OECD) Multinational Entities and tax authorities can use any of these five main transfer pricing methods:
a) Comparable uncontrolled price (CUP) method. The CUP method is grouped by the OECD as a traditional transaction method (as opposed to a transactional profit method)
b) Resale price method
c) Cost plus method
d) Transactional net margin method (TNMM)
e) Transactional profit split method.
Answer:
$35,860
Explanation:
The computation of the ending inventory using the retail inventory method is shown below
Particulars Cost Retail
Opening Inventory(A) $63,800 $128,400
Purchases(B) $115,060 $196,800
Goods available
C=(A-B) $178,860 $325,200
Cost ratio
($178,860 ÷ $325,200 × 100) 55%
Sales at retail (D) $260,000
End, Inventory at Retail $65,200
($325,200 - $260,000)
End, Inventory at Cost $35,860
($65,200 × 55%)
Answer: 2) increasing opportunity costs.
Explanation:
The Production Possibilities frontier is bowed out as it shows that for one more unit of a good to be produced, an additional unit of the other good must be given up.
This represents increasing opportunity costs because opportunity cost is the cost we incur for choosing one alternative over another. By producing more and more of one good, we give up more and more of the other good which means that our opportunity cost rises.
Answer:
B) fit for the ordinary purpose for which such goods are used.
Explanation:
An implied warranty of merchantability means that the products sold should fulfill an ordinary buyer's expectations and should be fit for the purpose intended.
All products carry an implied warranty of merchantability unless expressly disclaimed or identified as a sale "with all faults" or "as is".
