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Veronika [31]
3 years ago
11

Employees earn vacation pay at a rate of one day per month. Maxum estimated and must expense $13,000 of accrued vacation benefit

s for the year. During December, Maxum Company sold 12,000 units of a product that carries a 60-day warranty. December sales for this product total $460,000. The company expects 10% of the units to need warranty repairs, and it estimates the average repair cost per unit will be $15.
Required:
Prepare adjusting entries at December 31 for Maximum Company's year-end financial statements for each of the above separate transactions.
Business
1 answer:
weqwewe [10]3 years ago
3 0

Answer and Explanation:

The journal entries are shown below:

1

Vacation Benefit Expense  $13,000  

                To Vacation Benefit Payable $13,000

(Being vacation benefit expense is recorded)

2

Warranty Expense $18,000  

           To Estimated Warranty Liability $18,000

($12,000 × 10 % × $15) = $18,000

(Being warranty expense is recorded)

These two entries need to be passed

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Explanation:

A company's budget need to be closely linked to the needs of good strategy execution as the company

might utilize the budget as per the strategy to expand, gain capital from divesting to utilize in new initiatives.

The key here is to gain access to capital from different sources in order to utilize them in other present or future investments that will provide the best return. So, it is strategically very relevant to prioritize the budget earnings and spend as per the company strategy.

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3 years ago
Straight Industries purchased a large piece of equipment from Curvy Company on January 1, 2019. Straight Industries signed a not
Damm [24]

Answer:

$30,604

Explanation:

The computation of the interest expense for the year 2020 is as follows:

2019 interest expense is

= Equipment amount × rate of interest

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Now the interest expense for the year 2020 is

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= $30,604

3 0
3 years ago
When using the indirect method to complete the cash flows from operating activities section of the statement of cash flows, what
Nat2105 [25]

The correct option is D.

Subtract the loss from net income.

<h3>What is Cash Flow?</h3>

The volume of money a business brings in and expends is known as cash flow. Revenues from sales are used by businesses to pay expenses.

  • In accounting, the initial net cash flow that is recorded during all firm operational operations is calculated using the indirect technique of estimating or computing cash flow.
  • Under the indirect technique of completing the cash flow from operating activities, any initial net income or net loss is recorded at the beginning.
  • The initial level of net income includes all non-cash expenditures and expenses such as amortization and depreciation of tangible personal property and equipment.
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I understand that the question you are looking for is:

When using the indirect method to complete the cash flows from operating activities section of the statement of cash flows, what is the proper disposition of a loss on disposal of equipment? Multiple Choice

A. Add the loss to net income.

B. Disregard the loss because it relates to a financing activity.

C. Disregard the loss because it relates to an investing activity.

D. Subtract the loss from net income.

4 0
1 year ago
Suppose that, at an official ticket price of $480, there are 6,000 Justin Timberlake fans wanting to attend his concert, but onl
Nonamiya [84]

Answer:

A. The market clearing price of the tickets is more than $480.

Explanation:

Market-clearing price is a level where the quantity demanded of a product matches or the quantity supplied. At this price, A product or service does not experience any surplus or shortages.  It is the price where the demand curve and the supply curve intersect. The market-clearing price is the same as the equilibrium price.

As the price of $480, the demand for the show is at 6000, but supply is at 4000. There is a surplus in demand. The price of $480 is attractive to more people than supply can handle. Matching supply and demand would require the price to be set above the $480.

6 0
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