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Nostrana [21]
3 years ago
7

Consider the following transactions: The company uses supplies purchased in the previous period, $1,500.The company pays cash fo

r rent in advance, $6,000.The company repays a loan to the bank, $10,000 (ignore any interest cost).The amount of accrual-basis expense is _____ while the amount of cash-basis expense is _____.
Business
1 answer:
Step2247 [10]3 years ago
8 0

Answer:

Accrual basis expense is $1,500

Cash basis expense is $6,000

Explanation:

A company that follows accrual basis records expenses when it is incurred irrespective of when it is paid.

The company utilizes supplies in the current period that was purchased in the previous period. So, it will be recorded in the current period as accrual basis expense of $1,500.

Rent paid in advance is a liability for company following accrual basis, so it is not an accrual basis expense. It is a cash basis expense as an expense is recorded when cash is paid under cash basis.

So, cash basis expense is $6,000.

Loan amount repaid is a liability in both cases. So, liability is reduced by $10,000. It is not an expense. Only interest amount is expensed.

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An example of a cost that is likely to have a direct relationship with products being manufactured is
scoundrel [369]

Answer:

An example of a cost that is likely to have a direct relationship with products being manufactured is:

direct cost of raw materials.

Explanation:

Other direct costs that affect the cost of the products directly are direct labor costs and direct overhead costs.  They are traceable to the products being manufactured.  This is why they are called direct costs.  They can be attributed to the unit of production.  The opposite is the indirect  costs of raw materials, labor, and overheads.  These costs cannot be traced to units of the product being produced.

7 0
3 years ago
Consider an economy that only produces two goods: DVDs and DVD players. Last year, 10 DVDs were sold at $20 each and 5 DVD playe
dangina [55]

Answer:

$4,000

Explanation:

Given that,

Last year:

DVDs sold = 10

Selling price of each DVD = $20

DVD players sold = 5

Selling price of each DVD player = $100

This year:

DVDs sold = 150

Selling price of each DVD = $10

DVD players sold = 10

Selling price of each DVD player = $60

Real GDP:

= (No. of DVDs sold this year × Selling price of each DVD last year) + (No. of DVD players sold this year × Selling price of each DVD player last year)

= (150 × $20) + (10 × $100 )

= 3,000 + 1,000

= $4,000.

3 0
3 years ago
How to plan for a turbulent environment surrounding the current pandemic​
kompoz [17]

Explanation:

The long-running debate between the ‘rational design’ and ‘emergent process’ schools of strategy formation has involved caricatures of firms' strategic planning processes, but little empirical evidence of whether and how companies plan. Despite the presumption that environmental turbulence renders conventional strategic planning all but impossible, the evidence from the corporate sector suggests that reports of the demise of strategic planning are greatly exaggerated. The goal of this paper is to fill this empirical gap by describing the characteristics of the strategic planning systems of multinational, multibusiness companies faced with volatile, unpredictable business environments. In-depth case studies of the planning systems of eight of the world's largest oil companies identified fundamental changes in the nature and role of strategic planning since the end of the 1970s. The findings point to a possible reconciliation of ‘design’ and ‘process’ approaches to strategy formulation. The study pointed to a process of planned emergence in which strategic planning systems provided a mechanism for coordinating decentralized strategy formulation within a structure of demanding performance targets and clear corporate guidelines. The study shows that these planning systems fostered adaptation and responsiveness, but showed limited innovation and analytical sophistication

4 0
3 years ago
A The management of Gresa Inc. is reevaluating the appropriateness of using its present inventory cost flow method, which is ave
Zepler [3.9K]

Answer:

Gresa Inc.

Comparative Condensed Income Statements for 2017

under FIFO and LIFO.

                                                                  <u>  FIFO                               LIFO</u>

Sales                                                          1176450                    1176450

Cost Of Goods Sold                                 660,400                    657, 200

Gross Profit                                               516050                    539,500

Operating  Expense                                  $ 150,000               $ 150,000

Income before Tax                                      $ 366,050             $ 389500

Income Tax  (30%)                                       <u> $ 109815                  $ 116850</u>

<u>Net Income                                                     $  256235  $272650</u>

<em><u>Working :</u></em>

<em><u>Fifo Cost of Goods Sold= $ 10,000 +  $168,000 +  $ 150,000+ 156,000 + 176,400= </u></em>

<em><u>Lifo Cost of Goods Sold= $ 224,000 + 156,000+  $ 150,000+127,200</u></em>

Purchases were made quarterly as follows.

Quarter     Units         Unit Cost        Total Cost

1               70,000       $2.40             $168,000

2             60,000        2.50               150,000

3             60,000         2.60              156,000

4             80,000          2.80               224,000

                270,000                            $698,000

Inventories    Beginning (5,000 units)    $10,000          

Total net sales (253,000 units)  $1,176,450

Ending (22,000 units)

Total cost of goods purchased (270,000 units) 698,000

3 0
3 years ago
Changes in the prices of key commodities have a significant impact on a company's bottom line. For virtually all companies, the
Anna11 [10]

Answer:

Explanation:

A) Energy can be both a fixed cost and a variable cost for a company. This is due to the sense that energy in the form of fixed electricity bill even when no production takes place (telephone bill), a fixed cost and electricity bill when production takes place would be a variable cost

B) An increment in fixed cost will shift the ATC curve to the right while the MC curve would remain the same because MC is the change in variable cost as output increases and is not related to fixed cost.

C) Corn cost is a variable cost for ethanol producer as each unit of corn is used to produce ethanol and thus use of corn is reliant upon how much ethanol is produced. This makes corn a variable input dependent on the production of output, therefore, the cost of corn is variable.

D) An increment in the variable cost will shift the ATC curve to the right and individual MC curve to the right.

5 0
3 years ago
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