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timofeeve [1]
2 years ago
13

Finisher Inc. sells merchandise of $250,000 in 2020 that includes a three-year limited warranty. Warranty costs are estimated to

be 1% of sales. The company incurred actual costs of $800 in 2020 related to the warranties. a. Record the warranty accrual at the time of sale in 2020. b. Record the adjustment to the warranty accrual for actual warranty costs in 2020.
Business
1 answer:
N76 [4]2 years ago
8 0

Answer: See explanation

Explanation:

a. Record the warranty accrual at the time of sale in 2020.

Debit Warranty expense = $250,000 × 1% = $2,500

Credit Warranty Liability $2,500

(To record the warranty accrual)

b. Record the adjustment to the warranty accrual for actual warranty costs in 2020.

Debit Warranty Liability $800

Credit Cash and Payables $800

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Two eastern European countries formed a free trade agreement. As a result, one of the countries that used to produce its own pla
Aleonysh [2.5K]

Answer:

Trade creation

Explanation:

Trade creation is the process where there is increase in economics welfare as a result of joining a free trade area for example a customs Union.

Consumption experiences a shift from high cost producers to low cost producers causing expansion in trade.

In the given instance due to formation of free trade agreement, high cost plastic production is now replaced with low cost import of plastics from the other company.

There is a shift from high cost producers to low cost producers as a result of trade agreement between the two nations.

3 0
2 years ago
All of the following statements about price are true except a. small changes in price can have big effects on both the number of
MariettaO [177]

<u>Answer:</u>

<em>C. the price for most products and services is always the same.</em>

<em></em>

<u>Explanation:</u>

A price is primarily the task of a numeric incentive to an item. Prices help us to settle on ordinary monetary choices about our needs and wants. Prices are a sign of the popularity of a product; in this manner the more well known the product, the higher the value that can be charged. For instance, on the off chance that you see a table of strap tops available to be purchased, you can securely expect that bridle tops are not prevalent.

3 0
3 years ago
Which of the following is NOT one of the 5 typical sources of competitive pressures? Select one: a. The power and influence of i
allochka39001 [22]

Answer:

a. The power and influence of industry driving forces

Explanation:

As per Michael Porter, there exist five competitive forces that influence competition in an industry. The five forces as per Porter are:

  • Potential entrants
  • Industry competitors
  • Customers
  • Substitutes
  • Suppliers

Potential entrants refers to the risk of new entrants in the market.

Industry competitors refers to the extent of rivalry and competition between existing firms.

Customers relate to the negotiating or bargaining power of the customers and to what extent they exercise such power.

Substitutes refer to the emergence of substitute products in the market which may drive down a firm's sales.

Suppliers relate to the bargaining power exercised by suppliers with respect to inputs.

7 0
3 years ago
Justin Cement Company has had the following pattern of earnings per share over the last five years: Year Earnings Per Share 20X1
ElenaW [278]

Answer:

(a) $4.08

(b) $51.03

Explanation:

Constant growth rate for earnings:

= (EPS for any year ÷ EPS for the previous year) - 1

= (8.40 ÷ 8.00) - 1

= 0.05

= 5%

(a) EPS for 2016 = EPS for 2015 × (1 + 5%)

                          = 9.72 × 1.05

                          = $10.21          

Dividend for 2016 = 40% × EPS for 2016

                               = 40% × 10.206

                               = $4.08

(b) Stock Price at the beginning of 2016:

= Dividend for 2016 ÷ (Required rate of return - Constant growth rate)

= 4.0824 ÷ (0.13 - 0.05)

= $51.03

8 0
3 years ago
As of January 1, Year 2, Room Designs Inc. had a balance of $9,900 in Cash, $3,500 in Common Stock, and $6,400 in Retained Earni
dexar [7]

Answer:

What did the company purchase that resulted in the cash outflow from investing activities?

It purchases Land for 16,500

Explanation:

The investing activities outflow will be for the purchase of long tem assets in cash.

The complete cash outflow for investing activities is explain it through the land account:

cash outflow: 16,500

land:               16,500

There are no other long-term assets which can explain the variance plus, the land account covers the amount entirely.

6 0
2 years ago
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