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irina [24]
2 years ago
5

A company normally sells its product for $20 per unit. However, the selling price has fallen to $15 per unit. This company's cur

rent inventory consists of 200 units purchased at $16 per unit. Replacement cost has now fallen to $13 per unit. What is the amount of the lower cost of market adjustment the company must make as a result of this decline in value?
Business
1 answer:
nata0808 [166]2 years ago
8 0

Answer:

$200 (a deduction)

Explanation:

The accounting standard for inventories IAS 2 requires that inventory be carried at the lower of cost or net realizable value. Inventory will initially be recognized at the cost ( which includes the cost of the item and other associated cost such as freight ). However, its carrying amount must be reviewed to ensure it is not higher than the realizable value.

Given that the selling price is now $15 which is lower than the cost of $16, it means that the amount that can be realized from the sale of a unit is $15.

= $16 - $15

= $1

As such, an adjustment in form of a reduction of the carrying amount of $1 per unit is required. The amount of the lower cost of market adjustment the company must make as a result of this decline in value

= $1 × 200 units

= $200 (a deduction)

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During the process of operational planning, management must compare market demand with
sasho [114]
During the process of operational planning, management must compare market demand with Capacity.
Capacity refers to the company's ability to fulfill the amount of demand that exist for the products. If a company has a lot of orders without the ability to fulfill it, they will not be able to rake in the profit from the market.
8 0
3 years ago
Suppose that in 2011, per-person GDP in Singapore was $53,591, and in Egypt, it was $5,547, as measured in 2005 purchasing power
Lyrx [107]

Answer:

a. There are significant differences in incomes between high- and low-income countries.

Explanation:

Data provided in the question

Per person GDP in Singapore = $53,591

Per person GDP in Egypt = $5,547

Based on the above information

As we can see that the level of income in Singapore is higher than Egypt also when there is an important difference in the high income and low income countries the same is shown accurately

hence, the correct option is a.

5 0
2 years ago
During its first year of operations, Walnut Company completed the following two transactions. The annual accounting period ends
natima [27]

Date               Account title                      $Debit                  $Credit

Dec 31            Wages Expenses               4800

                       Wages Payable                                              4800

                          (to record accrued wages)

Jan 06             Wages Payable                 4800

                        Cash                                                              4800

                        (to record payment of wages in cash)

An accounting period, in bookkeeping, is the length with reference to which management accounts and monetary statements are prepared. In management accounting, the accounting period varies widely and is decided via management. monthly accounting periods are common.

An accounting duration is the time frame for which a business prepares its financial statements and reports its financial performance and position to external stakeholders. this could be after three, six, or twelve months. The accounting period usually coincides with the business's fiscal year.

learn more about the fiscal year here brainly.com/question/15982144

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6 0
1 year ago
Harlan enterprises manufactures smart phones. currently, harlan has $14,000 in raw materials and $25,000 in finished goods in it
Kitty [74]
Ideally;
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Assuming this ideal case, Harlan's inventory would be;

Inventory = $14,000+$25,000+$18,600 = $57,600

However, if work-in-progress inventory was listed as $0;

Then, the  new work-in-progress would be;
Inventory = 57,600-18,600 = $39,000

This would reduce the inventory for Harlan Enterprises which may affect other financial ratios such as inventory turn-over ratio. As a result, such ratios will not reflect the exact position of the company.
3 0
3 years ago
Alpha Co. is paying a $.64 per share dividend today. There are 158,000 shares outstanding with a par value of $1 per share. As a
muminat

Answer:

Dividend paid = $0.64 x 158,000 = $101,120. The dividend paid reduces retained earnings by $101,120.

The correct answer is C

Explanation:

Dividend is paid out of profit after tax. This reduces the retained earnings of the company since dividend involves outflow of cash.

3 0
2 years ago
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