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Anastasy [175]
3 years ago
9

Ahngram Corp. has 1,000 defective units of a product that cost $3.30 per unit in direct costs and $6.80 per unit in indirect cos

t when produced last year. The units can be sold as scrap for $4.30 per unit or reworked at an additional cost of $2.80 and sold at full price of $12.90. The incremental net income (loss) from the choice of reworking the units would be:________
a. $2,800.
b. $4,300.
c. $10,100.
d. ($2,800).
e. $0.
Business
1 answer:
OLga [1]3 years ago
4 0

Answer:

If the units are reworked, income will increase by $5,800.

Explanation:

Giving the following information:

Number of units= 1,000

Sell as-is= $4.3

Rework cost= $2.8

Selling price= $12.9

<u>Because the original cost will remain constant in both options, we will not take them into account.</u>

Sell as-is:

Effect on income= 1,000*4.3= $4,300

Rework:

Effect on income= 1,000*(12.9 - 2.8)

Effect on income= $10,100

If the units are reworked, income will increase by $5,800.

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Reporting the details of notes is consistent with which accounting principle that requires financial statements (including footn
alexgriva [62]

Answer:

The correct answer is Option B.

Explanation:

The full disclosure principle is a concept that requires all necessary details relating to the notes to the financial statements are provided and explained in such a way that would be understandable to the users of the financial statements.

The disclosures are expected to be in compliance with the accounting standards, regulatory pronouncements, among others.

6 0
3 years ago
On October 10, the stockholders’ equity of Sherman Systems appears as follows.
aniked [119]

Answer:

Sherman Systems

1. Journal Entries

                                                        Debit            Credit

a)  October 11:

Treasury Stock                            $68,000

Additional Paid-in Capital         $224,400

Cash                                                                     $292,400

To record purchase of 6,800 shares at $43 per share.

b) November 1:

Cash                                          $71,050

Treasury Stock                                                 $14,500

Additional Paid-in Capital                                $56,550

To record sale of 1,450 treasury shares at $49 per share.

c) November 25:

Cash                                       $203,300

Treasury Stock                                                  $53,500

Additional Paid-in Capital                                $149,800

To record sale of 5,350 treasury shares at $38 per share.

2. Revised Equity Section of Sherman Systems' Balance Sheet as at October 11:

Common stock at“$10 par value,

 90,000 shares authorized, issued, and outstanding $ 900,000

Paid-in capital in excess of par value, common stock        81,600

Treasury Stock                                                                    (68,000)

Retained earnings                                                           1,008,000

Total stockholders' equity                                            $1,921,600

Explanation:

1. Additional Paid-in Capital:

Balance on October 10       $306,000

Treasury Stock                   ($224,400)

Balance on October 11        $81,600

2. Treasury Stock is a contra account to Common Stock.  It represents the purchase of its own shares by a company.  There are two methods for accounting for treasury stock.  One is the par value method, where the adjustments for above or below par value are made in the Additional Paid-in Capital account.  The other method is the costing method, where the adjustments for above or below par value are made in the Treasury stock.

3. The equity section prepared above is limited to the October 11 transaction.  The transactions occurring on November 1 and 25 were not required by the question.

4.  The remaining shares of the treasury stock reissued on November 25 is equal to 6,800 - 1,450 = 5,350 shares.

3 0
3 years ago
Allen, inc., has a total debt ratio of .34. what is its debt-equity ratio
lawyer [7]
Total debt ratio is the ratio of total debt to total assets 
i.e 
Total debt ratio = Total debt / Total assets  
But Total assets is nothing but total equity plus total debt  
Now let us consider, 
TD = Total debt  
TE = Total equity 
TA= Total assets   
Therefore, 
Total debt ratio = TD/TA 
But as mentioned above 
TA = TD + TE  
total debt ratio = Total debt/(total debt+total equity) 
total debt ratio = .34(given) 
.34 = TD / (TD + TE)  
Solving this equation yields:  
0.34 = 1/(1+ TE/TD) 
0.34(1+TE/TD) = 1 
0.34 + 0.34TE/TD =1 
.34(TE/TD) = 1 - 0.34 
0.34 (TE/TD) = 0.66 
0.34TE = 0.66TD  
Now, Debt equity ratio is the ratio of Total debt to total equity  
Debt-equity ratio = TD / TE 
Debt-equity ratio = 0.34 / 0.66 
Debt-equity ratio = 0.51515152
6 0
3 years ago
which of the following home purchasing considerations would probably affect older home buyers the least
juin [17]
I'm guessing it is B because it doesn't have enough information. My reasoning is because: Just because you are buying a house doesn't mean you have kids or will have kids, and if you don't elementary school wouldn't be a factor you will consider

hope this helps
4 0
3 years ago
New corporate bond issues in excess of $50,000,000 are:________.
tamaranim1 [39]

Answer: C. II and III

Explanation:

Under the Security Act of 1933, new corporate bond issues of such high amounts are not exempt from the Act and so need to be registered with the Securities and Exchange Commission (SEC).

Also, as the amount exceeds $50,000,000, the issue is subject to the Trust Indenture Act of 1939 which states that the issuer should include certain protective provisions that are recommended by the SEC in order to protect bondholders. The adherence to these covenants will then be monitored by an independent trustee that is to be appointed by the Issuer.

8 0
3 years ago
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