If a company’s revenues are higher than its expenses, it will cause

Exercise 15-14 Presented below are two independent situations. 1. Flinthills Car Rental leased a car to Jayhawk Company for one

IrinaVladis [17]

Answer:

Part 1

Dr Lease rentals $300........ Expense

Cr Cash Account $300

Part 2

Dr Leased Equipment $63,536

Cr Finance Lease Liability $63,536

Explanation:

Part 1. Under the operating leases the lessee pays the monthly rentals which must be accounted for as an expense and the double entry is as under:

Dr Lease rentals $300........ Expense

Cr Cash Account $300

Part 2. Under the finance lease agreement, the lessee pays the value of the asset and the interest as well. So after the date of agreement when the asset is handed over the journal entry would be recording of the equipment received, which would written at its fair value or present value of the payments made. The journal entry would be:

Dr Leased Equipment $63,536

Cr Finance Lease Liability $63,536

8 0

4 years ago

McCoy's Fish House purchases a tract of land and an existing building for $990,000. The company plans to remove the old building

bekas [8.4K]

Answer:

$ 1,001,800

Explanation:

The following costs will be included in th cost of land

Purchase cost: 990,000

Closing cost: 2,900

Back Taxes: 8,900

(land taxes are payed every year, so they can't be included in the cost of land)

Total cost of land= 990,000+2,900+8,900= 1,001,800

6 0

4 years ago

Heather Green usually buys Heinz Catsup because she likes its taste. But this morning her local grocery was surprisingly out of

Radda [10]

Answer:

a. preference

Explanation:

As in the question it is mentioned that the heather Green normally purchased heinz Catsup as she likes the taste but she decided to purchase another brand i.e. highly advertised also it was on sale and she really needs it

So here the Heinz achieved the preference as usually she purchased the Catsup product but sh purchased another product due to high advertisement

So the preference is shifted to another product

Therefore option a is correct

3 0

3 years ago

Sophia, a teacher from Vancouver, Washington, can compare her compensation to peers in the District of Columbia, where pay is mu

KonstantinChe [14]

Answer:

adjust for purchasing power and conditions existing in the local market

Explanation:

the concept of Equity theory describes how resources can be distributed in a fair manner in comparison to others. Sophia has to adjust for what the money she receives can buy her and the prevailing conditions in the market in her own area. This is because in this theory, pay scale is affected by the purchasing power and condition of the market in whatever area that a person lives.

3 0

3 years ago

Assume that direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing o

Tatiana [17]

Answer:

$5,370

Explanation:

Missing word: "A customer has requested that Lewelling Corporation fill a special order for 2,100 units of product S47 for $26 a unit. While the product would be modified slightly for the special order, product S47's normal unit product cost is $19.20:

Direct materials $5.70, Direct labor 3.00, Variable manufacturing overhead 2.80, Fixed manufacturing overhead 7.70, Unit product cost $19.20"

Incremental analysis

Incremental revenue (2100*26) $54,600

Incremental cost

Direct material (2100*$5.7) $11,970

Direct labor (2,100*$3) $6,300

Variable manuf. overhead (2,100*$80) $5,880

Additional cost (2100*$2.00) $4,200

Special molds $15,000

Total incremental cost $49,230

Incremental profit (loss) $5,370 

The annual financial advantage (disadvantage) for the company as a result of accepting this special order should be $5,370.

5 0

3 years ago