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vredina [299]
4 years ago
15

Lisi Crichton operates a variety store. Her brother does custom welding and made some racks to hold videos. Lisi gave her brothe

r $5,000 cash and did not get a bill. A similar rack was on display at a department store for $1,000. You are told to book an expense on the company financial statement for $5000. What will you book the amount for?
Business
1 answer:
Feliz [49]4 years ago
8 0

Answer:

$1,000

Explanation:

Fixed assets must be recorded at historic cost or purchase value. Their valuation is not affected by changes in market values, e.g. land might appreciate over time, but its historic cost will be used for accounting purposes.

In this case, Lisi doesn't have a bill to show the price of the rack, and since she paid in cash, she has no way of proving what she actually paid for it. In this case, in order to record the purchase of the rack you must use the fair market value of similar racks.

Imagine if someone could just say that they purchased things at X price but didn't get a bill, soon people would be recording buying pencils at $500 each because they are gorgeous and perfectly crafted.

You might be interested in
Joseph exchanged land (tax basis of $34,000), that he had held for 4 years as an investment, for similar land valued at $42,000
brilliants [131]
<span>Joseph should report a long-term capital gain of $8,000. The fact that Adrian assumed the mortgage does not affect Joseph's tax basis. The only relevant facts here are the fact that the land acquired in the exchange has a value of $42,000, and the tax basis of the parcel exchanged is $34,000. $42,000 - $34,000 = $8,000.</span>
6 0
3 years ago
When technological know-how constitutes a firm’s core competence, which entry mode is the optimal choice?
charle [14.2K]

If a high-tech company unit up operations in another country, licensing and joint mission preparations need to be considered.

The finest preference of access mode relies upon the company's method.

When technology constitutes a firm's center competence, utterly-owned subsidiaries are favored, for the reason that they have high-quality control technology.

When control constitutes a company's core competence, foreign franchises controlled by way of joint ventures seem to be superior.

Learn more about the company's method here

brainly.com/question/24448358

#SPJ4

5 0
2 years ago
At year end, Tangshan China Company balance sheet showed total assets of $60 million, total liabilities (including preferred sto
Vaselesa [24]

Answer:

The correct answer is $22.5

Explanation:

According to the scenario, computation of the given data are as follows:

We can calculate the price of stock by using following formula:

Price of stock = (Net Income ÷ No of Shares) × PE Ratio

By putting the value in the formula, we get

Price of stock = ( $1,500,000 ÷ $1,000,000) × 15

= $1.5 × 15

= $22.5

6 0
4 years ago
Which of these activities will most likely impose an external cost? a. Betty plants flowers in her garden. b. Bonnie gets a flu
Firdavs [7]

Answer: C. Bridget drives her car after having too much alcohol to drink.

Explanation:

The external cost, also known as third party cost, is all negative cost that a third party receives for a good buying for us, that is, the negative effect that will happen for something that we consume. For example, when we buy a vehicle, the external cost is the emission of gases that are harmful to the environment.

In this case, the external cost is the danger to drivers and pedestrians because Bridget bought alcohol and then drove.

<em>I hope this information can help you.</em>

5 0
3 years ago
The approach of a firm using a "think global, act local" version of a global strategy entails:
nignag [31]

Answer:

The correct answer is letter "C": pursuing the same basic competitive strategy theme (low cost, differentiation, best cost, focused) in all countries where the firm does business but giving local managers some latitude to adjust product attributes to better satisfy local buyers and to adjust production, distribution, and marketing to be responsive to local market conditions.

Explanation:

"Think global, act local" is an approach by which firms spread their activities around the world with a standardized product or service. However, different regions imply having different consumers. Then, units in different countries have relative autonomy to adjust the product or service being offered to meer consumers' <em>preferences, expectations, </em>and <em>needs</em> to boost sales, thus, increase profits.

8 0
4 years ago
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