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aivan3 [116]
3 years ago
5

In 2021, Adonis Industries changed its method of valuing inventory from the average cost method to the FIFO method. At December

31, 2020, Adonis’s inventories were $47.2 million (average cost). Adonis’s records indicated that the inventories would have totaled $63.2 million at December 31, 2020, if determined on a FIFO basis.
Ignoring income taxes, what journal entry will Adonis use to record the adjustment in 2021?
Business
2 answers:
ipn [44]3 years ago
8 0

Answer:

$16 million is inputed on credit side of adjustment journal

Explanation:

Firstly, let us compare the FIFO method and the average cost method

Using FIFO method, we assign the cost of first acquired items to sales, while we assign the value of the closing stock to include the cost of recently acquired items.

In average cost method, the inventories have prices which are at the average of all available inventories. Average cost is obtained by dividing is total cost of goods available for sale by total units available for sale.

We proceed to calculate inventory value:

It is given that the average cost of inventory is $47.2million and inventory cost at book is $63.2million.

inventory value = Average cost of inventory value - Inventory cost at book = $47.2 - $63.2 millions = $16 million

We now proceed to the adjustment journal.

To fill the adjustment journal, we take note of the following;

Inventory is an asset. There is an increase in asset value. Therefore, it is debited.

Since Retained earnings are liability. There is an increase in liability value. Therefore, it is credited.

This means we put a value of $16 million on the credit side of the adjustment journal

Elena-2011 [213]3 years ago
7 0

Answer:

<u>Retained earnings under the Balance sheet</u>

Explanation:

Making comparisons between the two inventory value when using FIFO or Average cost method=

63.0M - 47.1M = $15.9M

We see an <em>increase</em> in the ending inventory.

Thus, this increase in income has been unprecedented, and may not have been distributed to the shareholders of Adonis Industries. On the balance sheet journal entry this extra income would be indicted on the balance sheet on the retained earnings column for year 2021.

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Answer: As a terorrism preparedness, local, country and state assets need to be in place as an answer to counterterrorism preparedness. National infrastructure preparedness plan which outlines how government and private sector participants in the community can work together to manage risks and achieve security and resilience outcomes.

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Explanation:

5 0
3 years ago
"Tariffs and other trade restrictions increase the domestic scarcity of products from abroad. Such policies benefit domestic pro
iris [78.8K]

Answer: is correct

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The tariff imposed on export will increase the price of the exported goods in the domestic market. Thus a majority population in the country will not purchase it and the domestic producers will benefit from this situation. In such a case, the domestic producers will make unreasonable profits from domestic consumers.

3 0
3 years ago
. Costs that the manager has the power to determine or at least strongly influence are called: Question 5 options: A. Uncontroll
GalinKa [24]

Answer:

B. Controllable costs

Explanation:

There are some costs that are expended by a company during the cost of carrying out their business operations. These costs such as labor costs and marketing budgets are incurred because the company has full authority over them. They are costs that can be altered in short term based on a business decision.

In other words, controllable costs are those costs or expenses that can be influenced by those who are saddled with the responsibilities of incurring them.

5 0
3 years ago
Vance has a vested account balance in his employer-sponsored qualified profit-sharing plan of $40,000. He has two years of servi
Maurinko [17]

Answer: $5,000

Explanation:

Per the requirements of qualified plans that permit loans, the maximum amount that an individual can withdraw is whichever is lesser between $50,000 and 50% of their Vested Account Balance.

Vance in this scenario has a vested account balance of $40,000.

50% of that would be $20,000.

That means that he can be loaned $20,000. However, he already has an outstanding loan balance that must be accounted for of 15,000.

Subtracting those figures we have,

= 20,000 - 15,000

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7 0
3 years ago
If aggregate planned expenditures in the economy increase by $100 million, then real GDP will _____ $100 million.
nirvana33 [79]

Answer:

Real GDP will rise by $100 million

Explanation:

Aggregate Demand [AD] is total amount of goods & services, all sectors of an economy are planning to buy . So AD = Aggregate Planned Expenditure [APE]

Aggregate Supply [AS] is total amount of goods & services, all sellers are planning to sell. As total output value of goods & services produced is distributed among factors of production, AS = National Income [NY] = GDP

At equilibrium : AD or APE =  AS or NY or GDP

If AD or APE increases by $100 million :

AD or APE  > AS or Aggregate Planned Production or GDP . This implies willingess to buy > willingness to produce. So, inventory levels will fall below desired level. To mantain inventory level, production [AS] & income level [GDP] will rise till it becomes equal to risen AD or APE

So, GDP will also rise by $100 million

6 0
3 years ago
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