Answer:
b. The pattern of inventory consumption and replenishment over time.
Explanation:
- In the context of the E.O.Q model, the terms sawtooth refers to the patterns of the inventory consumption which is replenished over the time.
- The economic order quantity is the order quantity that minimizes the holding and the ordering cost and is one of the best classical production schedules models and applies only when a demand for a product is constant
Answer:
The amount that the company would record for building would be $1,200,000.
Explanation:
We can allocate the fair values as follows:
Particulars Fair value Allocated amount
(a) (b) = (a)/Total*$2.4m
Building $1,300,000 $1,200,000
Land $780,000 720,000
Equipment $520,000 480,000
Total $2,600,000 $2,400,000
The amount that the company would record for building would be $1,200,000.
Answer:
Osaka ROI is 28%
Yokohama ROI is 18%
Explanation:
The formula for return on investment =net income/average operating assets*100
For Osaka division:
net income is $749,000
average operating assets is $2,675,000
return on investment=$749,000/$2,675,000*100
=28%
For Yokohama
net income is $3,330,000
average operating assets is $18,500,000
return on investment=$3,330,000/$18,500,000
=18%
Even though Yokohama has a higher net operating income ,the Osaka division recorded a better performance using ROI as a performance metric,which shows profit computation is an absolute figure which does not consider the amount of resources invested in order to earn the profit
Answer:
Please see Explanation
Explanation:
Management
Managers are not included in this list of users by the IASB Framework, because management should have access to all the financial information they need, and in much more detail than financial statements provide. However, management is responsible for producing the financial statements and might be interested in the information they contain.
Employees
Employees need information about the financial stability and profitability of their employer. An assessment of profitability can help employees to reach a view on the ability of the employer to pay higher wages, or provide more job opportunities in the future.
Investors
Investors in a business entity are the providers of risk capital. Unless they are managers as well as owners, they invest in order to obtain a financial return on their investment. They need information that will help them to make investment decisions.
Creditors
Financial information about an entity is also useful for suppliers who provide goods on credit to a business entity, and ‘other trade creditors’ who are owed money by the entity as a result of debts incurred in its business operations (such as money owned for rent or electricity or telephone charges). They can use the financial statements to assess how much credit they might safely allow to the entity.
Customers
Customers might be interested in the financial strength of an entity, especially if they rely on that entity for the long-term supply of key goods or services.
Tax authorities
The tax authorities use the information in the financial statement for the purpose of business regulation or deciding taxation policies.
Answer: The journals to record the sale of the receivables in Sunland Company's books are:
Debit Credit
Cash 729,600
Service charge expense 38,400
Accounts receivable 768,000
Explanation: Please note that Western Factors Inc. charges 5% of the amount of receivables sold. This means the cash transfer Sunland Company would make to western Factors Inc. would be net of the 5% service charge (5% * $768,000 = $38,400). Since Sunland is disposing the receivables, that account has to be credited. Then, the actual cash transfer would be $729,600 ($768,000 - 38,400). That is what Western Factors Inc. would now carry as its own receivables in its books.
