So, the dollar price of the jeans is the nominal variable, and the relative price is the real variable. The relative price of the jeans have been adjusted to inflation. The dollar price hasn't been adjusted for inflation, hence why it is the nominal variable (not adjusted for inflation).
Answer: 14.4 years
Explanation:
You can use the Rule of 72 to find out.
The Rule of 72 is a very useful formula that shows the amount of time it would take an amount to double given a certain growth rate.
The formula is:
= 72 / Growth rate in whole numbers
= 72 / 5
= 14.4 years
Approximately 14.4 years
Answer:
B. $10,000 Underapplied
Explanation:
Hourly rate = $250,000/100,000 = $2.5 per hour
Excess hours = 4000
Excess over head = 4000 * 2.5 = $10,000
There was a $10,000 underapplied overhead for that period
Answer:
a)
Rent Expense Dr.$16,000
Bank Dr.$48,000
Prepaid Rent Cr.$64,000
Explanation:
The company entered into lease on 1st November 2019 with rent of $8,000 per month. the company on 1st November 2019 recorded prepaid rent as follows; which is wrong
Prepaid Rent Dr. $72,000
Bank Cr. $72,000
This is wrong entry as prepaid rent was overstated by ($72,000-$24,000 ) $48,000 and same like bank was understated by $48,000
The correct entry should have been like this as on 1st November 2019;
Prepaid Rent Dr. $24,000
Bank Cr. $ 24,000
By 31st December 2019, two months rent have already accrued so prepaid rent should be credited by (8000*2+48,000 for additional amount recorded)
<em>So the rectifying entry is; as on 31st December 2019</em>
<em>Rent Expense Dr.$16,000</em>
<em>Bank Dr.$48,000</em>
<em>Prepaid Rent Cr.$64,000</em>
Answer:
Lets see what are the double entries of borrowings and purchase of new manufacturing equipment and their implications:
Double Entry for borrowings:
Dr Bank $500,000
Cr Notes Payable $500,000
The above double entry shows that the total assets and Notes Payable are increased due to this transaction. Furthermore, in the Statement of Cash flow we see an increase in Cash from Financing activities and decrease in the Cash from investing activities.
The second transaction is purchase of new manufacturing equipment. It must be accounted for as under:
Dr Manufacturing Equipment $500,000
Cr Bank $500,000
This transaction shows that net impact on the total assets is same as one asset has been increased by spending the other asset. This transaction also has no impact on Cash for financing, inventories and notes payable balances. However, their is increased negative balance in cash from investing activities.
