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Inessa [10]
2 years ago
15

The balance sheet value of a firm's inventory is $60,000. Suppose that the firm purchases supplies at a cost of $3,500 and adds

them to inventory. A day later, the market value of the recently purchased supplies changes to $1,000.
Assuming no other changes to inventory, and using the historical cost method, what is the final balance sheet value of inventory?
Note: Students with prior accounting experience should not apply the monthly "lower of cost or market" adjustment. This is a day-to-day fluctuation.
Business
1 answer:
Andreyy892 years ago
3 0

Answer:

$63,500

Explanation:

Calculatuon to determine the Final balance sheet value of inventory using the historical cost method

Using this formula

Final balance sheet value of inventory=Balance sheet value of firm's inventory+Supplies

Let plug in the formula

Final balance sheet value of inventory= $60,000+$3,500

Final balance sheet value of inventory= $63,500

Therefore Final balance sheet value of inventory is $63,500

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Keisha is buying John's house. The closing date (day belongs to seller) of the sale transaction is September 1 (day 244 of the y
SSSSS [86.1K]

Answer: $116.026

Explanation:

Given the following ;

Yearly hazard insurance = $350

Keisha is the buyer and the closing date of transaction is September 1 of the year.

January 1 till September 1 = 244days

Now Keisha will have to credit John from September 2 till December 31st of that year

Therefore,

September 2 till December 31 = 365 - 244 = 121 days

Daily hazard insurance = $350 ÷ 365 = $0.9589

Keisha's share = $0.9589 × 121 = $116.026

7 0
2 years ago
Why is "equilibrium" also sometimes called "market clearing price"? Group of answer choices
masya89 [10]

Answer: B.At equilibrium, quantity supplied and quantity demanded are equal ensuring that at that price consumers will not want more and producers will not supply more.

Explanation:

The point where the market demand and marker supply curves intersect is known as the equilibrium point. The price at which equilibrium occurs is the market clearing price.

It is called the market clearing price because at that price both producers and customers are in equilibrium. Above the equilibrium price, there's is excess supply and below the equilibrium price, there's excess demand.

5 0
3 years ago
Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserv
lapo4ka [179]

Answer:

a) First Main Street Bank's T-account (before the bank makes any new loans) will look as follows:

<u>                   Assets                         |                Liabilities                  </u>

Reserves                   $1,800,000 |  Deposits             $1,800,000

b) The effect of a new deposit on excess and required reserves when the required reserve ratio is 25% are as follows:

Amount Deposited (Dollars) = $1,800,000

Change in Excess Reserves (Dollars) = $1,350,000

Change in Required Reserves (Dollars) = $450,000

Explanation:

a) Complete the following table to reflect any changes in First Main Street Bank's T-account (before the bank makes any new loans)

A deposit of $1,800,000 by Yakov into his checking account at First Main Street Bank will lead to the creation of both an asset and a liability for First Main Street Bank.

The reserves on the asset side of the T-account of First Main Street Bank will therefore increase by $1,800,000. This gives the bank the opportunity to able to give loan to its other customers from the additional reserves.

On the other hand, the deposit of $1,800,000 by Yakov will be recorded as a demand deposit on the liability side of the T-account of First Main Street Bank. This is because it is possible for Yakov to withdraw his deposit at any time.

This transaction will therefore be reflected as follows:

<u>                   Assets                         |                Liabilities                  </u>

Reserves                   $1,800,000 |  Deposits             $1,800,000

b) Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 25%.

Note: See the attached excel file to see how the table will actually look.

The required reserve ratio of 25% implies that First Main Street Bank is required by law to hold 25% of the new reserves which in this case is the initial deposits from Yakov.

By calculating this, 25% of $1,800,00 is $450,000 and it indicates an increase of $450,000 in the required reserve of First Main Street Bank.

After deducting 25% from 100%, we have 75% left. And 75% of $1,800,000 is $1,350,000. This $1,350,000 is the excess reserves that First Main Street Bank can use to give loans to other customers.

The breakdown is therefore as follows:

Amount Deposited (Dollars) = $1,800,000

Change in Excess Reserves (Dollars) = 75% * $1,800,000 = $1,350,000

Change in Required Reserves (Dollars) = 25% * $1,800,000 = $450,000

Download xlsx
5 0
3 years ago
A policy maker argues that congestion on the roads can be solved by private ownership of the roads. He argues that if the roads
Roman55 [17]

Answer:

Externalities can be defined as those activities that incurs cost on another party.

Road congestion creates externalities such as increased time for travel, more pollution in a city, more likelihood of accidents, more stress for road users.

This externaliity is caused because road users think of the private benefits that they can get from using the road but they do not take the social cost into account. We have lots of drivers on the road and non of these drivers takes cognizance of the cost that other drivers get because of this.

If road are private, congestion is going to fall and there would be excludability. But this is a public good, turning it to a private good would cause issues. Private markets benefits out is positive externalities.

4 0
2 years ago
What are three economic reasons for corporate acquisitions and mergers?
pantera1 [17]

Answer:The three main types of merger are horizontal mergers which increase market share, vertical mergers which exploit existing synergies and concentric mergers which expand the product offering.

Explanation:

6 0
2 years ago
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